SlideShare a Scribd company logo
Yahoo!’s 100 Day Review:



                                    “What Should Yahoo! Do Regarding
                                           Social Networks”?


                                                                                                                                                Kunal Madhukar, CFA
                                                                                                Victor B. Anthony
                                                   Lilian Y. Zhou
Robert S. Peck, CFA
                                                                                                                                                            212-272-6130
                                                                                                       212-272-9885
                                                         212-272-1509
       212-272-6665
                                                                                                                                                         kmadhukar@bear.com
                                                                                                 Victor.Anthony@bear.com
                                                       lzhou@bear.com
      rpeck@bear.com
  ***Bear Stearns does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could
  affect the objectivity of this report.
  ***Customers of Bear Stearns in the United States can receive independent, third-party research on the company or companies covered in this report, at no cost to them,where such research is
  available. Customers can access this independent research at www.bearstearns.com/independentresearch or can call (800) 517-2327 to request a copy of this research.
   ***Investors should consider this report as only a single factor in making their investment decision.
   ***PLEASE READ THE IMPORTANT DISCLOSURE AND ANALYST CERTIFICATION INFORMATION IN THE ADDENDUM SECTION OF THIS REPORT.

                                                                                                                                                                                    Confidential
                                                                                      August 1st, 2007
Executive Summary
•   7/17/07 - CEO Jerry Yang declared a “100 day review” of co’s strategic direction.
•   Mr. Yang stated that nothing was a “sacred cow”
•   One of the topics we feel the company must be reviewing closely is:
    Social Networking.
•   Social networks are growing much faster than the “traditional portals”
•   The question is will social networks become the new portal?
•   Our full report assesses the following questions:
     o How big is the industry?
     o How fast is it growing?
     o What are the advertising dollar opportunities?
     o Who are the players?
     o What are the companies worth?


                                                                              Confidential
                                                                                             1
Why Social Networking Is Important to Yahoo!?

We believe it’s a priority for several reasons:

   1. Social networking could cause a shift of the portal paradigm

   2. Social networking sites may have Ad Dollar Splintering (ADS) effects

   3. Social networking sites’ massive user information could be extremely valuable
      to behavioral targeting (Yahoo!’s SmartAds).
       a.   Higher targetability and CPMs




                                                                             Confidential
                                                                                            2
Major Participants Overview

There are 4 categories in the social networking space:

•   Leisure-Oriented Sites: entertainment focused sites, open to all users
     o MySpace, Facebook, Friendster, Bebo, Orkut, Windows Live Space, Hi5

•   Professional Networking Sites: sites focusing on business networking
     o LinkedIn, itLinkz

•   Media Sharing Sites: sites focusing on the distribution and consumption of
    user-generated multi-media content, such as video and photos
     o YouTube, Flickr

•   Virtual Meeting Place Sites: sites that are essentially a 3-D virtual world,
    built and owned by its residents (the users)
     o Second Life

                                                                             Confidential
                                                                                       3
Social Networking – High Profile Already?
•   Already mainstream – YouTube / CNN Democratic debate (July 2007).




     Source: YouTube

                                                                        Confidential
                                                                                       4
Social Networking (SN) – The New Portal?
•   Majority of younger users are spending more time (51%) on user-generated sites vs. traditional sites.

    Percent of Domestic Time Spent Online at User-Generated vs. Traditional Sites Feb.-March 2007


        120%

        100%

         80%           49%
                                           65%                                                      66%
                                                              74%                 77%
         60%

         40%
                       51%
         20%                               35%                                                      34%
                                                              27%                 23%
          0%
                  Millennials (13-    Generation X       Baby Boomers       Matures (61-75) All respondents
                        24)             (25-41)             (42-60)

                                             User generated      Company generated

    Source: Deloitte & Touche; eMarketer.com: “User-Generated Content: Will Web 2.0 Pay Its Way?”


                                                                                                              Confidential
                                                                                                                             5
Social Networking – Not Just the “Kids”
•    The largest user group is older (35-54 yrs) than most realize (i.e. monetizable)
•    Mirroring the domestic Internet demographics

                        Total Internet     MySpace.com       Facebook.com       Friendster.com      Bebo.com        Hi5.com
                                 178,839           70,478             27,965                1,667          4,083         2,914
Unique Visitors (000)
Total Audience                     100.0            100.0              100.0                100.0          100.0         100.0
Persons 12-17                       10.1               6.6              15.2                  6.8           27.2          11.1
Persons 18-24                       12.0             18.0               26.9                 11.2             9.7         16.1
Persons 25-34                       16.0             19.4               11.5                 21.2           13.6          21.1
                                    38.9             42.3               34.4                 44.8           34.8          37.9
Persons 35-54
Persons 55+                         14.8             10.0                 6.6                10.7             7.1          8.2
Source: comScore




                                                                                                                      Confidential
                                                                                                                                     6
How Big is Social Networking?
•   In June 2007, domestic visitors were ~115M, representing ~64% of total U.S. Internet users.
                                                                             %     YoY    Seq.
                                         Jun-06      May-07     Jun-07
                                                                          Reached Growth Growth
                                                                             100%
                 Total Internet            172,907    177,487     178,839             3%     1%

                 Yahoo! Sites              128,671    130,526     133,093   74%     3%      2%

                                                                            64%
                 Social Networking             N/A    112,150     115,104            NM     3%
             1   MYSPACE.COM                52,342     68,939      70,478   39%     35%     2%
             2   FACEBOOK.COM               13,752     26,649      27,965   16%    103%     5%
             3                                                               8%
                 Classmates.com Sites       13,963     12,103      14,846            6%    23%
            4                                                                5%
                 FLICKR.COM                  5,913      8,447       9,622           63%    14%
             5                                                               5%
                 Windows Live Spaces         8,720      7,998       8,271           -5%     3%
             6                                                               4%
                 AOL People Connection       9,324      6,455       7,069         -24%      9%
             7                                                               4%
                 Yahoo! Groups               7,745      6,607       6,263         -19%     -5%
             8   BEBO.COM                    1,713      3,711       4,083    2%   138%     10%
             9                                                               2%
                 XANGA.COM                   6,822      4,039       3,961         -42%     -2%
            10                                                               2%
                 MSN Groups                  5,550      4,024       3,659         -34%     -9%
            11                                                               2%
                 Yahoo! 360°                 4,686      3,797       3,507         -25%     -8%
            12                                                               2%
                 AIM Pages                     333      2,804       3,340         904%     19%
            13   HI5                          2102       2502       2914     2%    39%     16%
            14   FRIENDSTER.COM              1,356      1,654       1,667    1%    23%      1%
            15   LINKEDIN.COM                  342       1652       1734     1%   407%      5%

       Source: comScore

                                                                                                  Confidential
                                                                                                                 7
Social Networking is Growing Faster
•   The social networking group and certain sites are growing much faster than Yahoo!.
                                                                             %     YoY    Seq.
                                         Jun-06      May-07     Jun-07
                                                                          Reached Growth Growth
                                                                             100%
                 Total Internet            172,907    177,487     178,839             3%     1%

                 Yahoo! Sites              128,671    130,526     133,093   74%     3%      2%

                                                                            64%
                 Social Networking             N/A    112,150     115,104            NM     3%
             1   MYSPACE.COM                52,342     68,939      70,478   39%     35%     2%
             2   FACEBOOK.COM               13,752     26,649      27,965   16%    103%     5%
             3                                                               8%
                 Classmates.com Sites       13,963     12,103      14,846            6%    23%
            4                                                                5%
                 FLICKR.COM                  5,913      8,447       9,622           63%    14%
             5                                                               5%
                 Windows Live Spaces         8,720      7,998       8,271           -5%     3%
             6                                                               4%
                 AOL People Connection       9,324      6,455       7,069         -24%      9%
             7                                                               4%
                 Yahoo! Groups               7,745      6,607       6,263         -19%     -5%
             8   BEBO.COM                    1,713      3,711       4,083    2%   138%     10%
             9                                                               2%
                 XANGA.COM                   6,822      4,039       3,961         -42%     -2%
            10                                                               2%
                 MSN Groups                  5,550      4,024       3,659         -34%     -9%
            11                                                               2%
                 Yahoo! 360°                 4,686      3,797       3,507         -25%     -8%
            12                                                               2%
                 AIM Pages                     333      2,804       3,340         904%     19%
            13   HI5                          2102       2502       2914     2%    39%     16%
            14   FRIENDSTER.COM              1,356      1,654       1,667    1%    23%      1%
            15   LINKEDIN.COM                  342       1652       1734     1%   407%      5%

       Source: comScore

                                                                                                  Confidential
                                                                                                                 8
Social Networking – It’s Global
•   It’s a global phenomenon – many sites are growing even faster internationally.
                                                                         %     YoY    Seq.
                                   May-06       Apr-07      May-07
                                                                      Reached Growth Growth
                                                                          100%
             Total Internet           705,644     766,188     771,997             9%       1%

             Yahoo! Sites             480,200     467,642     469,826    61%     -2%      0%

                                                                         59%
            Social Networking             N/A     431,492     454,132            NM       5%
         1 MYSPACE.COM                 61,635     104,961     109,535    14%               4%
                                                                                78%
                                                                         14%
         2 Windows Live Spaces         96,199     108,072     107,279           12%      -1%
         3 FACEBOOK.COM                14,096      38,764      47,208     6%   235%      22%
         4 HI5.COM                     20,864      29,345      28,492     4%    37%       -3%
                                                                          3%
         5 FLICKR.COM                  13,289      23,976      26,781          102%      12%
                                                                          3%
         6 Yahoo! Groups               21,006      24,582      25,615           22%       4%
         7 FRIENDSTER.COM              14,175      22,517      24,684     3%    74%      10%
         8 Orkut                       13,049      22,343      23,104     3%    77%        3%
                                                                          2%
         9 MSN Groups                  24,919      18,597      18,398          -26%      -1%
         10 BEBO.COM                    6,135      14,408      17,246     2%   181%      20%
                                                                          2%
         11 Classmates.com Sites       16,681      17,467      16,423           -2%      -6%
                                                                          2%
         12 AOL Hometown               17,956      16,525      15,944          -11%      -4%
       Source: comScore

                                                                                                Confidential
                                                                                                               9
Page Views (Inventory) Are Growing Rapidly
 •   Yahoo!’s Domestic PVs are declining (partially due to AJAX), while other sites are exploding.
                                          Jun-06      May-07      Jun-07      YoY Growth Seq. Growth
                  Total Internet            492,975     459,025     473,831          -4%        3%

                  Yahoo! Sites               39,680      36,232      34,927         -12%        -4%

                  Social Networking             N/A     112,150     115,104          NM         3%
              1   MYSPACE.COM                30,187      44,402      46,469         54%          5%
              2   FACEBOOK.COM                6,093      15,841      14,785        143%         -7%
              3   BEBO.COM                    1,085       1,978       2,201        103%        11%
              4   GAIAONLINE.COM                273         777         750        175%        -3%
              5   Orkut                         346         312         455         32%        46%
              6   HI5.COM                       332         370         394         19%          7%
              7   FRIENDSTER.COM                 92         361         336        264%         -7%
              8   Classmates.com Sites          259         290         326         26%        12%
              9   Yahoo! Groups                 431         379         293        -32%       -23%
             10   Windows Live Spaces           212         221         244         15%        10%
             11   AOL People Connection         247         120         183        -26%        53%
             12   FLICKR.COM                     80         128         179        124%        40%
             13   Yahoo! 360°                   208         141         158        -24%        12%
             14   XANGA.COM                     649         164         155        -76%        -6%
             15   MSN Groups                    213         123         150        -30%        22%
             16   LINKEDIN.COM                   31          23          26        -16%        13%
              Source: comScore


                                                                                                       Confidential
                                                                                                                 10
Global Page Views Are Also Growing Rapidly
 •   Yahoo!’s Global PVs are declining too, while other sites are growing even faster than domestic.

                                      May-06        Apr-07       May-07        YoY GrowthSeq. Growth
               Total Internet           1,828,000    1,925,110     1,944,666          6%        1%

               Yahoo! Sites              114,432       107,055      106,530          -7%        0%

               Social Networking             N/A       193,498      222,036           NM       15%
           1   MYSPACE.COM                28,807        48,911       50,593          76%         3%
           2   Orkut                      20,204        33,134       34,438          70%         4%
           3   FACEBOOK.COM                6,562        26,655       29,882         355%       12%
           4   BEBO.COM                    2,176         9,396       11,202         415%       19%
           5   FRIENDSTER.COM              2,186         6,402        8,990         311%       40%
           6   HI5.COM                     4,776         7,280        7,192          51%        -1%
           7   W indows Live Spaces        2,130         2,439        2,226           5%       -9%
           8   Yahoo! 360°                   516           791          913          77%       15%
           9   Yahoo! Groups                 827           807          764          -8%       -5%
          10   LINKEDIN.COM                   40            49           79          98%       61%
           Source: comScore

                                                                                                       Confidential
                                                                                                                 11
SN Users Are Engaging for Longer
•   Yahoo!’s global MOUs are declining too, while SN’s are seeing robust growth.
                                                                           %     YoY
                                     May-06       Apr-07      May-07
                                                                        Reached Growth
                                                                            100%
              Total Internet            705,644     766,188     771,997             9%

              Yahoo! Sites              480,200     467,642     469,826    61%     -2%

                                                                           59%
              Social Networking             N/A     431,492     454,132            NM
         1    MYSPACE.COM                61,635     104,961     109,535    14%    78%
                                                                           14%
         2    Windows Live Spaces        96,199     108,072     107,279           12%
         3    FACEBOOK.COM               14,096      38,764      47,208     6%   235%
         4    HI5.COM                    20,864      29,345      28,492     4%    37%
                                                                            3%
         5    FLICKR.COM                 13,289      23,976      26,781          102%
                                                                            3%
         6    Yahoo! Groups              21,006      24,582      25,615           22%
         7    FRIENDSTER.COM             14,175      22,517      24,684     3%    74%
                                                                            3%
         8    Orkut                      13,049      22,343      23,104           77%
                                                                            2%
         9    MSN Groups                 24,919      18,597      18,398          -26%
         10   BEBO.COM                    6,135      14,408      17,246     2%   181%
                                                                            2%
         11   Classmates.com Sites       16,681      17,467      16,423           -2%
                                                                            2%
         12   AOL Hometown               17,956      16,525      15,944          -11%
                                                                            1%
         13   LINKEDIN.COM                 1245        3852        4101          229%
         Source: comScore

                                                                                         Confidential
                                                                                                    12
Geographic Mix Shift is Changing
       •   Facebook and MySpace have had their Unique Visitors base diversify geographically

             Facebook                                                   MySpace
                0.20%
100%
                                                              100%
                                                                     16.54%
80%                                                  43.55%                                              37.06%
                                                              80%

60%                                                           60%
               99.80%
                                                                     83.46%
                                                              40%
40%
                                                                                                         62.94%
                                                     56.45%
                                                              20%
20%
                                                               0%
 0%
                                                                      2006                               2007
                   2006                              2007
                                                                              Domestic   International
                          Domestic   International


Source: comScore




                                                                                                                  Confidential
                                                                                                                            13
How Big is the Advertising Market?
•      U.S. User-Generated Content Advertising Revenues - est. $4.3B by 2011, 43% CAGR.

      5,000                                                                                      140%
                                       132%
                                                                                         4,303
      4,500
                                                                                                 120%
      4,000
                                                                                                 100%
      3,500                                                                      3,292
      3,000                                                                                      80%
                                                     68%         2,477
      2,500
                                                                                                 60%
      2,000                                       1,748             42%           33%    31%
      1,500                                                                                      40%
                                   1,042
      1,000
                                                                                                 20%
                    450
        500
          0                                                                                      0%
                   2006            2007           2008           2009            2010    2011
    Source: eMarketer.com: “User-Generated Content: Will Web 2.0 Pay Its Way?”




                                                                                                        Confidential
                                                                                                                  14
How Big is the Advertising Market?
•   Global User-Generated Content Advertising Revenues – est. $8.2B.

    9,000                                                                                         160%
                                                                                          8,175
                                     148%
    8,000                                                                                         140%
    7,000                                                                                         120%
                                                                              5,925
    6,000
                                                                                                  100%
    5,000                                           79%        4,210                              80%
    4,000
                                               2,796               51%                            60%
    3,000                                                                           41%     38%
                                1,562                                                             40%
    2,000
                 630                                                                              20%
    1,000
        -                                                                                         0%
                 2006           2007            2008           2009           2010        2011
       Source: eMarketer.com: “User-Generated Content: Will Web 2.0 Pay Its Way?”




                                                                                                         Confidential
                                                                                                                   15
SN’s to Reach ~12% of Online Advertising?
•   Social Networking Advertising Revenues as a Percentage of Online Advertising Spend.

      14%
                                                                                      11.8%
      12%
                                                                              10.2%
      10%                                                      8.8%
                                               7.3%
       8%
                                5.3%
       6%

       4%       2.7%
       2%
       0%
                2006            2007            2008           2009           2010    2011

       Source: eMarketer.com: “User-Generated Content: Will Web 2.0 Pay Its Way?”




                                                                                              Confidential
                                                                                                        16
Who’s Actually Advertising Today?
•   Major brands have already gotten comfortable with social networks.

     Exhibit Marketers & Advertisers that have Employed UG and Viral Video Advertising
                             Ban (deodorant)                    Jet Blue
                             Blendtec                           L'Oreal
                             Cadillac                           M&M's
                             Chevrolet Tahoe                    Mastercard
                             Chrysler                           Mentos
                             Converse                           Ray Ban
                             Coca-Cola                          Smirnoff
                             Doritos                            Sony
                             Dove                               Toyota
                             Geico                              Volkswagon
     Source: emarketer.com




                                                                                         Confidential
                                                                                                 17
How are budgets growing?
Exhibit U.S. Online Marketers’ Planned Spending on Emerging Advertising Tactics (% of
respondents)


                                                2005 (predicted 2006 (budgeted
                                                  2006 use)        for 2007)
   Ads on third-party blogs and blog networks              30%             42%
   Social networking                                        N/A            40%
   Adding RSS feeds                                        40%             37%
   Video ads                                               27%             37%
   Sponsoring podcasts                                     14%             18%
   Mobile/wireless                                         20%             16%
   Ads in RSS feeds                                        21%             15%
   Product placement in video games                        10%               9%
Source: MarketingSherpa Inc; eMarketer.com: “User-Generated Content: Will Web
2.0 Pay Its Way?”




                                                                                        Confidential
                                                                                                  18
Social Networking – The New Portal?

• Social networking sites are taking on the new role of disseminating public
  information by:
        Adding “special channel” / portal-like features that are very timely and targeted.
    •
          • MySpace’s launch of the Impact channel for 2008 Presidential election
          • Many presidential candidates have profiles on Facebook
          • Youtube has the “YouChoose ‘08” campaign that allows users to get to know candidates through their
             videos.
          • Youtube also teamed up with CNN for the CNN YouTube debates, which recently aired on July 23,
             2007

• Developer platform – F8
    • Users can tie data from outside of the Social Networking Ecosystem to their profiles
          •   i.e. weather, music, horoscopes, news
    • Can dampen user visits to traditional portals for basic needs




                                                                                                       Confidential
                                                                                                                 19
The Ad Dollar Splintering (ADS) Effect
• New advertising channels that entice advertising dollars away – the Ad Dollar Splintering (ADS) effect
       o Additional industry page view inventory; could put pressure on CPMs
• Use the evolution of television as a parallel to understand how increased choices may affect consumption
 (analysis done by Spencer Wang, Bear Stearns Cable and Entertainment Analyst.)
                                                100%


                                                                                                                                                                                                                                                                     Other (1)
                                                                                                             26.3       26.2
                                                                                                  27.1                            26.9
                                                       27.5                                                                                            27.7                  27.6                                        27.3                  27.3       27.3
                                                                                       27.9                                                  28.0                 27.8                                        28.2                  27.7
                                                                  29.2      28.9                                                                                                        29.3       28.9
                                                80%
                Share of Total Day TV Viewing




                                                       11.8
                                                                  13.8      16.2       19.5                  23.4
                                                                                                  22.7                  24.4      24.6
                                                60%
                                                                                                                                             28.1      30.3       32.7       35.0                                                                                       Ad-
                                                                                                                                                                                        36.7       38.1       41.1       44.3       45.4       46.5                  Supported
                                                                                                                                                                                                                                                          48.3
                                                                                                                                                                                                                                                                       Cable
                                                40%

                                                       60.7
                                                                  57.0      54.9       52.6                  50.3
                                                                                                  50.2                  49.4      48.5
                                                                                                                                             43.9      42.0
                                                20%                                                                                                               39.5       37.4
                                                                                                                                                                                        34.0       33.0       30.7       28.4       26.8       26.2                    Big 3
                                                                                                                                                                                                                                                          24.4


                                                 0%
                                                        1986/87


                                                                  1987/88


                                                                             1988/89


                                                                                        1989/90


                                                                                                   1990/91


                                                                                                              1991/92


                                                                                                                        1992/93


                                                                                                                                   1993/94


                                                                                                                                             1994/95


                                                                                                                                                        1995/96


                                                                                                                                                                   1996/97


                                                                                                                                                                              1997/98


                                                                                                                                                                                         1998/99


                                                                                                                                                                                                    1999/00


                                                                                                                                                                                                               2000/01


                                                                                                                                                                                                                          2001/02


                                                                                                                                                                                                                                     2002/03


                                                                                                                                                                                                                                                2003/04


                                                                                                                                                                                                                                                           2004/05
 Source: Bear Stearns & Co., Inc.

                                                                                                                                                                                                                                                                          Confidential
                                                                                                                                                                                                                                                                                    20
SN’s Could Augment Behavioral Targeting

We believe the vast amount of personal information on social networking sites could
significantly aid Yahoo!’s behavioral targeting initiatives:

•   Yahoo! recently soft launched SmartAds
     o Deliver more targeted display advertising to its users, using demographic and
     behavioral data
     o Reinvigorate the growth of branded display advertising

• Yahoo! can fully leverage social networking sites’ massive database of user
information to better compete with Google
     o One of the reasons for Google’s DoubleClick acquisition was to help it better
     target display advertising.




                                                                                Confidential
                                                                                           21
Who Are the Potential Acquisition Candidates? - Facebook
• Yahoo! has a high concentration of international visitors;
          Facebook has a stronger domestic mix of 57%.
• Facebook’s stellar growth helps Yahoo!’s declining traffic
    Yahoo vs. Facebook Unique Visitor International and Domestic Mix
                       International              International Domestic YoY
                            Mix      Domestic Mix YoY Growth      Growth
     Yahoo                     72.0%        28.0%            -3%         0.3%
     Facebook                  43.6%        56.5%       74297%            89%
    Source: comScore




•Yahoo! and Facebook could complement traffic and viewership on opposite ends
    Yahoo vs. Facebook Percent (%) Unique Visitor Composition
                       Persons 12-17 Persons 18-24 Persons 25-34 Persons 35-54         Persons 55+
     Yahoo                       9.8%                12.3%             17.4%   39.6%        13.8%
     Facebook                   15.2%                26.9%             11.5%   34.4%         6.6%
    Source: comScore



                                                                                                     Confidential
                                                                                                                22
What Should Yahoo! Pay – FaceBook Valuation

• Illustrative analysis only
• Should depict of HOW we think Yahoo! would look at it
   •Yahoo! management should have more refined information

• Focuses only on display revenues;
not incremental revs from search or premium services
• Investors can use this as a roadmap




                                                             Confidential
                                                                        23
What Should Yahoo! Pay – FaceBook Valuation
We believe price could have been the major deterrent to Yahoo!’s past pursuit in the space.
Below is our attempt to build out the projections; investors can tweak assumptions on their own understanding.

• Revenue Drivers:
      • Social Networking 84% and 25% of Internet UVs and PVs vs. Portals of 90% and 25% today
      • Page Views:
               • Estimate PV to grow from 265 billion in 2007 to 1.6 trillion in 2016.
               • Currently growing ~200%, but we expect growth rate to decelerate significantly over the next nine years.
               • Estimate FB PV to comprise 5.5% of total Internet PV in 2016 - Yahoo currently accounts for 5.5% of global PV.

      • Monetized Page Views:
            • We sampled a significant amount of pages on Facebook
            • North of 60% of pages are being monetized. For conservatism, we use 60% monetization rate
            • Expect this percentage to increase to ~70% in 2016.

      • Prime Ad Revenues:
              • Estimate prime page views as a % of total to reach 10% in 2007 and grow to 20% in 2016.
              • Estimate Prime CPM to amount to ~$4 based on conversation with industry contacts and grow to ~$18 in 2016.

      • Remnant Ad Revenues:
             • Estimate remnant page views as a % of total to reach 90% in 2007 and steadily declining to comprise 80% in 2016
             • Estimate Remnant CPM of ~$0.50, based on industry estimates and increase steadily to ~$2 in 2016.
• EBITDA Estimates:
      Assuming EBITDA margins of close to high 20%s growing to high 30%s



                                                                                                                                  Confidential
                                                                                                                                             24
What Should Yahoo! Pay – FaceBook Valuation (Cont’d)
                                            2006          2007           2008           2009           2010           2011            2012           2013           2014           2015           2016
      Internet Users - EOP (000)         740,984       815,082        880,289        924,303        961,275        999,726       1,029,718      1,060,609      1,081,822      1,103,458      1,125,527
Global
Social Networking Users - EOP (000)      381,753       572,630        732,966        828,252        869,665        895,754         913,670        922,806        932,034        941,355        950,768

FACEBOOK
Facebook Visitors - EOP (000)            22,753         50,056         82,593        107,371        128,845        148,171         165,952        182,547        197,151        208,980        219,429
      % YoY Growth                                       120%            65%            30%            20%            15%             12%            10%              8%             6%             5%
      % Penetration of Internet Users                       6%             9%           12%            13%            15%             16%            17%            18%            19%            19%
      % Penetration of SNUs                                 9%           11%            13%            15%            17%             18%            20%            21%            22%            23%

Page Views (in MM)                       88,201        264,604        502,748        703,848        879,810       1,055,772      1,214,138      1,335,551      1,442,395      1,528,939      1,605,386
       % YoY Growth                                      200%            90%            40%             25%             20%            15%            10%             8%             6%             5%
       % of Social Netowrking PVs            6%             8%           11%            12%             14%             16%            18%            20%            21%            21%            22%
       % of Internet PVs                   0.4%           1.2%           2.1%           2.9%           3.5%            4.0%           4.5%           4.8%           5.1%           5.3%           5.5%

Page Views Utilization                                   60.0%          62.0%          63.5%          65.0%          66.5%          68.0%           69.5%          71.0%          71.0%         71.0%

Monetized Page Views (in MM)                           158,763        311,704        446,943        571,876        702,088         825,614        928,208      1,024,101      1,085,547      1,139,824

Prime Page Views (in MM)                                15,876          37,404         62,572         91,500        126,376        165,123        185,642        204,820        217,109        227,965
       % of Total Monetized Page Views                     10%             12%            14%            16%            18%            20%            20%            20%            20%            20%
Prime CPM                                                $4.30           $5.16          $6.15          $7.28          $8.53          $9.92         $11.53         $13.40         $15.58         $18.11
       % YoY Growth                                                        20%            19%            18%            17%            16%            16%            16%            16%            16%
Prime Ad Revenues                                   $68,267,947   $193,007,140   $385,024,729   $665,780,950 $1,078,167,592 $1,637,652,804 $2,140,342,976 $2,745,197,742 $3,382,769,918 $4,129,093,531

Remnant Page Views                                     142,886         274,300        384,371        480,376        575,712        660,491        742,566        819,281        868,437        911,859
     % of Total Monetized Page Views                       90%             88%            86%            84%            82%            80%            80%            80%            80%            80%
Remnant CPM                                              $0.50           $0.60          $0.72          $0.85          $0.99          $1.15          $1.34          $1.56          $1.81          $2.11
     % YoY Growth                                                          20%            19%            18%            17%            16%            16%            16%            16%            16%
Remnant Ad Revenues                                 $71,443,200   $164,579,732   $275,017,664   $406,436,045   $571,122,368   $761,698,979   $995,508,361 $1,276,836,159 $1,573,381,357 $1,920,508,619

Total Ad Revenues                                  $139,711,147   $357,586,872   $660,042,393 $1,072,216,996 $1,649,289,959 $2,399,351,783 $3,135,851,337 $4,022,033,901 $4,956,151,275 $6,049,602,150

EBITDA                                              $39,119,121   $108,706,409   $213,853,735   $358,120,477   $567,355,746   $849,370,531 $1,141,449,887 $1,504,240,679 $1,903,162,089 $2,323,047,225
        EBITDA Margin %                                    28%            30%            32%            33%            34%            35%            36%            37%            38%            38%
        % YoY Growth                                                     178%            97%            67%            58%            50%            34%            32%            27%            22%
- Tax (@ 20% Revs)                                                                                71,624,095    113,471,149    169,874,106    228,289,977    300,848,136    380,632,418    464,609,445
- Capex (10% Revs)                                  $13,971,115    $35,758,687    $66,004,239   $107,221,700   $164,928,996   $239,935,178   $313,585,134   $402,203,390   $495,615,127 $604,960,215
= ~ Free Cash Flows                                 $25,148,007    $72,947,722   $147,849,496   $179,274,682   $288,955,601   $439,561,247   $599,574,776   $801,189,153 $1,026,914,544 $1,253,477,565


                                                                                                                                                                                          Confidential
  Source: Bear Stearns & Co., Inc.
                                                                                                                                                                                                     25
What Should Yahoo! Pay – FaceBook Valuation
(Cont’d)
• DCF Suggest $5-$6B
      • WACC 17%, 10x Terminal Multiple
• 45x EBITDA multiple supports valuation
      • Recent AQNT and DoubleClick multiples 41x and 45x, respectively
• Sensitivity analysis
      • $4.5b- $7b
.                                                                  WACC
                                               15%      16%              17%       18%      19%
                                   $5,768
                                     $3.50   $6,469   $5,606           $5,041    $4,348   $3,878
                                     $4.00            $6,112           $5,496    $4,740
                                             $7,053                                       $4,227
                    Prime CPM        $4.30            $6,415           $5,768    $4,974
                                             $7,403                                       $4,436
                                     $5.00            $7,123           $6,404    $5,522
                                             $8,220                                       $4,924
                                     $5.50   $8,804   $7,628           $6,858    $5,913   $5,273



                                                               EBITDA Multiple
                                             40.0x    42.0x            45.0x     48.0x    50.0x
                                   $4,892
                                     $3.50   $3,912   $4,107           $4,401    $4,694   $4,890
                                     $4.00            $4,394           $4,708    $5,021
                                             $4,185                                       $5,231
                    Prime CPM        $4.30            $4,566           $4,892    $5,218
                                             $4,348                                       $5,435
                                     $5.00            $4,967           $5,322    $5,676
                                             $4,730                                       $5,913
                                     $5.50   $5,003   $5,253           $5,629    $6,004   $6,254

Source: Bear Stearns & Co., Inc.

                                                                                                   Confidential
                                                                                                             26
New Trends – Mobile Opportunity
•   Mobile is the next leg of growth for social networking
     – Allow users to access social networking sites anywhere in real-time, which could
       increase the amount of time users spend on these sites
     – GPS enabled devices adds real world dimension - enable users to keep friends updated
       on his or her location.

•   Examples of social networking sites that have begun to go mobile include
    Twitter.com and Bliin.com

•   Mobile Internet penetration is still low (17% of the current wireless subscribers also
    subscribe to mobile Internet services), allowing more room for growth

•   In 2006, the mobile advertising market estimated to be around $1.5 billion

•   There are currently 2.6 billion cell phone subscribers in the world and are expected
    to reach 3.8 billion in 2010


                                                                                      Confidential
                                                                                                 27
Issues
•   Regulation of Security
     –   Scammers use easily accessible information to mislead members into providing private information
     –   Distribution of links and attachments that contain harmful content

•   Valuable Tools for Employers/Universities
     –   Employers are using social networks to evaluate potential employees
     –   Universities, such as the U.K.’s Oxford, use social networking sites to track behavior of students
     –   Raise question of privacy and confidentiality

•   Banning Social Networking in the Workplace
     –   Businesses are blocking social networking sites because they feel they disrupt employee productivity
     –   Sites create problems with spam and viruses

•   Sexual Predators
     –   Registered sex offenders use memberships on social networking sites to befriend younger users
     –   July 2007- MySpace released and deleted profiles of 29,000 members who are registered sex
         offenders




                                                                                                        Confidential
                                                                                                                   28
Conclusions

1.   Social Networking is growing and here to stay
2.   SN’s could become the new portals
       a)   Yahoo! risks being potentially marginalized
3.   SN’s can be monetized
4.   Large market opportunity
5.   Yahoo! needs a stronger presence in SNs
6.   Acquisitions make sense
       a)   Valuations may seem large, but justified
7.   Mobile – could present next leg of growth
                                                          Confidential
                                                                     29
Questions?




             Confidential
                        30
ADDENDUM
IMPORTANT DISCLOSURES

ANALYST CERTIFICATION

The research analyst(s) primarily responsible for the preparation of this research report hereby certify that all of the views expressed in this
research report accurately reflect their personal views about any and all of the subject securities or issuers.The research analyst(s) also certify
that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this
research report.

Robert Peck
Lead Analyst Name

Yahoo! Corp.[YHOO]: Bear, Stearns & Co. Inc. is a market maker in this company's equity securities.
Yahoo! Corp.[YHOO]: Within the past twelve (12) months, Bear, Stearns & Co. Inc. or one of its affiliates has received non-investment banking
compensation from this company.
Yahoo! Corp.[YHOO]: The subject company is or during the past twelve (12) months has been a non-investment banking client (securities
related services) of Bear Stearns & Co. Inc.


For the Bear, Stearns recommendation history of rated companies in this report, please visit:
http://www.bearstearns.com/charts/getchart.htm?symbol=YHOO

The costs and expenses of Equity Research, including the compensation of the analyst(s) that prepared this report, are paid out of the Firm's
total revenues, a portion of which is generated through investment banking activities.

This report has been prepared in accordance with the Firm's conflict management policies. Bear Stearns is unconditionally committed to the
integrity, objectivity, and independence of its research. Bear Stearns research analysts and personnel report to the Director of Research and
are not subject to the direct or indirect supervision or control of any other Firm department (or members of such department).

This publication and any recommendation contained herein speak only as of the date hereof and are subject to change without notice. Bear
Stearns and its affiliated companies and employees shall have no obligation to update or amend any information or opinion contained herein,
and the frequency of subsequent publications, if any, remain in the discretion of the author and the Firm.


                                                                                                                                           Confidential
Bear, Stearns & Co. Inc. Equity Research Rating System:
Ratings for Stocks (vs. analyst coverage universe):
Outperform (O) - Stock is projected to outperform analyst's industry coverage universe over the next 12 months.
Peer Perform (P) - Stock is projected to perform approximately in line with analyst's industry coverage universe over the next 12 months.
Underperform (U) - Stock is projected to underperform analyst's industry coverage universe over the next 12 months.

Ratings for Sectors (vs. regional broader market index):
Market Overweight (MO) - Expect the industry to perform better than the primary market index for the region (S&P 500 in the US) over the next 12 months.
Market Weight (MW) - Expect the industry to perform approximately in line with the primary market index for the region (S&P 500 in the US) over the next
12 months.
Market Underweight (MU) - Expect the industry to underperform the primary market index for the region (S&P 500 in the US) over the next 12 months.

Robert Peck,Consumer Internet : Amazon.Com,Baidu.com,Bankrate,Ebay Inc.,Expedia, Inc.,GSI Commerce,Google,IAC/InterActiveCorp.,Liberty
Interactive,Vistaprint Ltd.,Yahoo! Corp.

Bear, Stearns & Co. Inc. Ratings Distribution as of June 30, 2007:
Percentage of BSC universe with this rating / Percentage of these companies which were BSC investment banking clients in the last 12 months.
Outperform (Buy):      42.6 / 15.8
Peer Perform (Neutral): 49.8 / 11.1
Underperform (Sell): 7.6 / 7.5

OTHER DISCLAIMERS

This report has been prepared by Bear, Stearns & Co. Inc., Bear, Stearns International Limited or Bear Stearns Asia Limited (together with their affiliates,
quot;Bear Stearnsquot;), as indicated on the cover page hereof. Responsibility for the content of this report has been accepted by Bear, Stearns & Co. Inc. for
distribution in the United States. If you are a recipient of this publication in the United States, orders in any securities referred to herein should be placed
with Bear, Stearns & Co. Inc. This report has been approved for publication in the United Kingdom by Bear, Stearns International Limited, which is
authorized and regulated by the United Kingdom Financial Services Authority. Private Customers in the U.K. should contact their Bear, Stearns
International Limited representatives about the investments concerned. This report is distributed in Hong Kong by Bear Stearns Asia Limited, which is
regulated by the Securities and Futures Commission of Hong Kong. Recipients of this report from Bear Stearns Asia Limited should contact representatives
of the latter in relation to any matter referred to herein. Additional information is available upon request.

                                                                                                                                                     Confidential
Bear Stearns and its employees, officers, and directors deal as principal in transactions involving the securities referred to herein (or options or other instruments
related thereto), including in transactions which may be contrary to any recommendations contained herein. Bear Stearns and its employees may also have
engaged in transactions with issuers identified herein. Bear Stearns is affiliated with a specialist that may make a market in the securities of the issuers referred to
in this document, and such specialist may have a position (long or short) and may be on the opposite side of public orders in such securities.

This publication does not constitute an offer or solicitation of any transaction in any securities referred to herein. Any recommendation contained herein may not
be suitable for all investors. Although the information contained in the subject report (not including disclosures contained herein) has been obtained from
sources we believe to be reliable, the accuracy and completeness of such information and the opinions expressed herein cannot be guaranteed. This publication
and any recommendation contained herein speak only as of the date hereof and are subject to change without notice. Bear Stearns and its affiliated companies
and employees shall have no obligation to update or amend any information or opinion contained herein.

This publication is being furnished to you for informational purposes only and on the condition that it will not form the sole basis for any investment decision.
Each investor must make their own determination of the appropriateness of an investment in any securities referred to herein based on the tax, or other
considerations applicable to such investor and its own investment strategy. By virtue of this publication, neither Bear Stearns nor any of its employees, nor any
data provider or any of its employees shall be responsible for any investment decision. This report may not be reproduced, distributed, or published without the
prior consent of Bear Stearns. ©2007. All rights reserved by Bear Stearns. Bear Stearns and its logo are registered trademarks of The Bear Stearns Companies
Inc.

This report may discuss numerous securities, some of which may not be qualified for sale in certain states and may therefore not be offered to investors in such
states. This document should not be construed as providing investment services. Investing in non-U.S. securities including ADRs involves significant risks such
as fluctuation of exchange rates that may have adverse effects on the value or price of income derived from the security. Securities of some foreign companies
may be less liquid and prices more volatile than securities of U.S. companies. Securities of non-U.S. issuers may not be registered with or subject to Securities
and Exchange Commission reporting requirements; therefore, information regarding such issuers may be limited.

NOTE TO ACCOUNT EXECUTIVES: For securities that are not listed on the NYSE, AMEX, or Nasdaq National Market System, check the Compliance page
of the Bear Stearns Intranet site for State Blue Sky data prior to soliciting or accepting orders from clients.

CIR 230 Disclaimer
 Bear Stearns does not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any
transaction.

In order for Bear Stearns to comply with Internal Revenue Service Circular 230 (if applicable), you are notified that any discussion of U.S. federal tax issues
contained or referred to herein is not intended or written to be used, and cannot be used, for the purpose of: (A) avoiding penalties that may be imposed under the
Internal Revenue Code; nor (B) promoting, marketing or recommending to another party any transaction or matter discussed herein.
                                                                                                                                                         Confidential

More Related Content

What's hot

Assistants and social media
Assistants and social mediaAssistants and social media
Assistants and social media
Yves Van Seters
 
Top 10 need-to-knows_about_social_networking_and_where_it_is_headed
Top 10 need-to-knows_about_social_networking_and_where_it_is_headedTop 10 need-to-knows_about_social_networking_and_where_it_is_headed
Top 10 need-to-knows_about_social_networking_and_where_it_is_headed
Dr. William J. Ward
 
Social Media For Sale
Social Media For SaleSocial Media For Sale
Social Media For Sale
Long Nguyen Thanh
 
China Social Media Whitepaper 2012
China Social Media Whitepaper 2012China Social Media Whitepaper 2012
China Social Media Whitepaper 2012
Rocky Fu
 
BoostBargains-Mobile Coupons Modernizes Shopping
BoostBargains-Mobile Coupons Modernizes ShoppingBoostBargains-Mobile Coupons Modernizes Shopping
BoostBargains-Mobile Coupons Modernizes Shopping
Rebecca Randells
 
Exhibitor2010 Lumen Consulting Leveraging Social Media To Drive Better Engage...
Exhibitor2010 Lumen Consulting Leveraging Social Media To Drive Better Engage...Exhibitor2010 Lumen Consulting Leveraging Social Media To Drive Better Engage...
Exhibitor2010 Lumen Consulting Leveraging Social Media To Drive Better Engage...
Lumen Consulting
 
Social Networking Conference 2010
Social Networking Conference 2010Social Networking Conference 2010
Social Networking Conference 2010
LaSandra Brill
 
Blurring The Boundaries And Keeping It Real
Blurring The Boundaries And Keeping It RealBlurring The Boundaries And Keeping It Real
Blurring The Boundaries And Keeping It Real
Miriam Rayman
 
Social strategies
Social strategiesSocial strategies
Social strategies
Misiek Piskorski
 
Social media Presentation without video
Social media Presentation without videoSocial media Presentation without video
Social media Presentation without video
Salene Kraemer
 
Cross-Platform Planning
Cross-Platform PlanningCross-Platform Planning
Cross-Platform Planning
Digital Next Australia
 
Médias Sociaux en Belgique et ailleurs
Médias Sociaux en Belgique et ailleursMédias Sociaux en Belgique et ailleurs
Médias Sociaux en Belgique et ailleurs
Rolling Talks
 
HTown Day 2012 - Bob Hale
HTown Day 2012 - Bob HaleHTown Day 2012 - Bob Hale
HTown Day 2012 - Bob Hale
Houston Association of REALTORS®
 
The internet as a social phenomenon
The internet as a social phenomenonThe internet as a social phenomenon
The internet as a social phenomenon
Mads Holmen
 
2011 MBA Online mobile and Social Media - The Emerging Trends
2011 MBA   Online mobile and Social Media - The Emerging Trends2011 MBA   Online mobile and Social Media - The Emerging Trends
2011 MBA Online mobile and Social Media - The Emerging Trends
Joe Dahleen
 
Listening and Responding to Your Customers and Prospects
Listening and Responding to Your Customers and ProspectsListening and Responding to Your Customers and Prospects
Listening and Responding to Your Customers and Prospects
LaSandra Brill
 
12.10.09 Lumen & CEMA Webinar: Leveraging Social Media to Drive Better Attend...
12.10.09 Lumen & CEMA Webinar: Leveraging Social Media to Drive Better Attend...12.10.09 Lumen & CEMA Webinar: Leveraging Social Media to Drive Better Attend...
12.10.09 Lumen & CEMA Webinar: Leveraging Social Media to Drive Better Attend...
Lumen Consulting
 
Social media forum - Gavin Heaton
Social media forum - Gavin HeatonSocial media forum - Gavin Heaton
Social media forum - Gavin Heaton
Connecting Up
 

What's hot (18)

Assistants and social media
Assistants and social mediaAssistants and social media
Assistants and social media
 
Top 10 need-to-knows_about_social_networking_and_where_it_is_headed
Top 10 need-to-knows_about_social_networking_and_where_it_is_headedTop 10 need-to-knows_about_social_networking_and_where_it_is_headed
Top 10 need-to-knows_about_social_networking_and_where_it_is_headed
 
Social Media For Sale
Social Media For SaleSocial Media For Sale
Social Media For Sale
 
China Social Media Whitepaper 2012
China Social Media Whitepaper 2012China Social Media Whitepaper 2012
China Social Media Whitepaper 2012
 
BoostBargains-Mobile Coupons Modernizes Shopping
BoostBargains-Mobile Coupons Modernizes ShoppingBoostBargains-Mobile Coupons Modernizes Shopping
BoostBargains-Mobile Coupons Modernizes Shopping
 
Exhibitor2010 Lumen Consulting Leveraging Social Media To Drive Better Engage...
Exhibitor2010 Lumen Consulting Leveraging Social Media To Drive Better Engage...Exhibitor2010 Lumen Consulting Leveraging Social Media To Drive Better Engage...
Exhibitor2010 Lumen Consulting Leveraging Social Media To Drive Better Engage...
 
Social Networking Conference 2010
Social Networking Conference 2010Social Networking Conference 2010
Social Networking Conference 2010
 
Blurring The Boundaries And Keeping It Real
Blurring The Boundaries And Keeping It RealBlurring The Boundaries And Keeping It Real
Blurring The Boundaries And Keeping It Real
 
Social strategies
Social strategiesSocial strategies
Social strategies
 
Social media Presentation without video
Social media Presentation without videoSocial media Presentation without video
Social media Presentation without video
 
Cross-Platform Planning
Cross-Platform PlanningCross-Platform Planning
Cross-Platform Planning
 
Médias Sociaux en Belgique et ailleurs
Médias Sociaux en Belgique et ailleursMédias Sociaux en Belgique et ailleurs
Médias Sociaux en Belgique et ailleurs
 
HTown Day 2012 - Bob Hale
HTown Day 2012 - Bob HaleHTown Day 2012 - Bob Hale
HTown Day 2012 - Bob Hale
 
The internet as a social phenomenon
The internet as a social phenomenonThe internet as a social phenomenon
The internet as a social phenomenon
 
2011 MBA Online mobile and Social Media - The Emerging Trends
2011 MBA   Online mobile and Social Media - The Emerging Trends2011 MBA   Online mobile and Social Media - The Emerging Trends
2011 MBA Online mobile and Social Media - The Emerging Trends
 
Listening and Responding to Your Customers and Prospects
Listening and Responding to Your Customers and ProspectsListening and Responding to Your Customers and Prospects
Listening and Responding to Your Customers and Prospects
 
12.10.09 Lumen & CEMA Webinar: Leveraging Social Media to Drive Better Attend...
12.10.09 Lumen & CEMA Webinar: Leveraging Social Media to Drive Better Attend...12.10.09 Lumen & CEMA Webinar: Leveraging Social Media to Drive Better Attend...
12.10.09 Lumen & CEMA Webinar: Leveraging Social Media to Drive Better Attend...
 
Social media forum - Gavin Heaton
Social media forum - Gavin HeatonSocial media forum - Gavin Heaton
Social media forum - Gavin Heaton
 

Viewers also liked

Theatre template
Theatre templateTheatre template
Theatre template
coolstuff
 
Topo template
Topo templateTopo template
Topo template
coolstuff
 
Al Gore pictures
Al Gore picturesAl Gore pictures
Al Gore pictures
coolstuff
 
Yahoo Investor Mar18
Yahoo Investor Mar18Yahoo Investor Mar18
Yahoo Investor Mar18
coolstuff
 
George Bush Daughter Jenna Married Henry Hagar
George Bush Daughter Jenna Married Henry HagarGeorge Bush Daughter Jenna Married Henry Hagar
George Bush Daughter Jenna Married Henry Hagar
coolstuff
 
The Great Olympic Lip Sync
The Great Olympic Lip SyncThe Great Olympic Lip Sync
The Great Olympic Lip Sync
coolstuff
 
Benazir Bhutto Of Pakistan Assasinated
Benazir Bhutto Of Pakistan AssasinatedBenazir Bhutto Of Pakistan Assasinated
Benazir Bhutto Of Pakistan Assasinated
coolstuff
 

Viewers also liked (7)

Theatre template
Theatre templateTheatre template
Theatre template
 
Topo template
Topo templateTopo template
Topo template
 
Al Gore pictures
Al Gore picturesAl Gore pictures
Al Gore pictures
 
Yahoo Investor Mar18
Yahoo Investor Mar18Yahoo Investor Mar18
Yahoo Investor Mar18
 
George Bush Daughter Jenna Married Henry Hagar
George Bush Daughter Jenna Married Henry HagarGeorge Bush Daughter Jenna Married Henry Hagar
George Bush Daughter Jenna Married Henry Hagar
 
The Great Olympic Lip Sync
The Great Olympic Lip SyncThe Great Olympic Lip Sync
The Great Olympic Lip Sync
 
Benazir Bhutto Of Pakistan Assasinated
Benazir Bhutto Of Pakistan AssasinatedBenazir Bhutto Of Pakistan Assasinated
Benazir Bhutto Of Pakistan Assasinated
 

Similar to What should Yahoo do regarding social networks

Social Media Training for Government
Social Media Training for GovernmentSocial Media Training for Government
Social Media Training for Government
GovLoop
 
Social Media Webcast Slides
Social Media Webcast SlidesSocial Media Webcast Slides
Social Media Webcast Slides
Tina Lambert
 
Silicon Valley Start-up from Idea to Liquidity Event
Silicon Valley Start-up from Idea to Liquidity EventSilicon Valley Start-up from Idea to Liquidity Event
Silicon Valley Start-up from Idea to Liquidity Event
Vojvodina ICT Cluster
 
Blogs as Bridges: How Web 2.0 Connects People Across the Ages (and Across Age...
Blogs as Bridges: How Web 2.0 Connects People Across the Ages (and Across Age...Blogs as Bridges: How Web 2.0 Connects People Across the Ages (and Across Age...
Blogs as Bridges: How Web 2.0 Connects People Across the Ages (and Across Age...
Andrew Krzmarzick
 
Gov 2.0 for Texas Certified Public Manager (CPM ) Program
Gov 2.0 for Texas Certified Public Manager (CPM ) ProgramGov 2.0 for Texas Certified Public Manager (CPM ) Program
Gov 2.0 for Texas Certified Public Manager (CPM ) Program
GovLoop
 
Social it-purchasing-spiceworks-webinar-slides
Social it-purchasing-spiceworks-webinar-slidesSocial it-purchasing-spiceworks-webinar-slides
Social it-purchasing-spiceworks-webinar-slides
Spiceworks Ziff Davis
 
Investor Relations in the Age of MySpace
Investor Relations in the Age of MySpaceInvestor Relations in the Age of MySpace
Investor Relations in the Age of MySpace
University Technology Malaysia
 
Marketing on facebook
Marketing on facebookMarketing on facebook
Marketing on facebook
Digiword Ha Noi
 
Environmental Health in a Social Media World --Mia Zmud
Environmental Health in a Social Media World --Mia ZmudEnvironmental Health in a Social Media World --Mia Zmud
Environmental Health in a Social Media World --Mia Zmud
Steve Lipton
 
Take The Leap: Finding the Right Place for Social Media in Your Organizationa...
Take The Leap: Finding the Right Place for Social Media in Your Organizationa...Take The Leap: Finding the Right Place for Social Media in Your Organizationa...
Take The Leap: Finding the Right Place for Social Media in Your Organizationa...
Kevin Trowbridge, Ph.D., APR
 
Social Media Attribution - Havas Digital Insights
Social Media Attribution - Havas Digital InsightsSocial Media Attribution - Havas Digital Insights
Social Media Attribution - Havas Digital Insights
Havas Media
 
Havas Digital - Social Media Attribution
Havas Digital - Social Media AttributionHavas Digital - Social Media Attribution
Havas Digital - Social Media Attribution
Havas Media Miami
 
FACEBOOK
FACEBOOKFACEBOOK
FACEBOOK
Junayed Roman
 
The Insidious Plot to Socialize the Enterprise
The Insidious Plot to Socialize the EnterpriseThe Insidious Plot to Socialize the Enterprise
The Insidious Plot to Socialize the Enterprise
Ogilvy Consulting
 
Engage Influencers: The Social Challenge
Engage Influencers: The Social ChallengeEngage Influencers: The Social Challenge
Engage Influencers: The Social Challenge
Acxiom Corporation
 
Social Media Disclosure - Is Now the Time? - June 14, 2011
Social Media Disclosure - Is Now the Time? - June 14, 2011Social Media Disclosure - Is Now the Time? - June 14, 2011
Social Media Disclosure - Is Now the Time? - June 14, 2011
Darrell Heaps
 
Social Media Overview for Business
Social Media Overview for BusinessSocial Media Overview for Business
Social Media Overview for Business
BrandON! marketing.technology
 
Act Presentation Final 02 18 09
Act Presentation Final 02 18 09Act Presentation Final 02 18 09
Act Presentation Final 02 18 09
WebWisedom
 
How to make social media work for Investor Relations - January 31, 2012
How to make social media work for Investor Relations - January 31, 2012How to make social media work for Investor Relations - January 31, 2012
How to make social media work for Investor Relations - January 31, 2012
Darrell Heaps
 
Teigland_Exploring future of value creation
Teigland_Exploring future of value creationTeigland_Exploring future of value creation
Teigland_Exploring future of value creation
Robin Teigland
 

Similar to What should Yahoo do regarding social networks (20)

Social Media Training for Government
Social Media Training for GovernmentSocial Media Training for Government
Social Media Training for Government
 
Social Media Webcast Slides
Social Media Webcast SlidesSocial Media Webcast Slides
Social Media Webcast Slides
 
Silicon Valley Start-up from Idea to Liquidity Event
Silicon Valley Start-up from Idea to Liquidity EventSilicon Valley Start-up from Idea to Liquidity Event
Silicon Valley Start-up from Idea to Liquidity Event
 
Blogs as Bridges: How Web 2.0 Connects People Across the Ages (and Across Age...
Blogs as Bridges: How Web 2.0 Connects People Across the Ages (and Across Age...Blogs as Bridges: How Web 2.0 Connects People Across the Ages (and Across Age...
Blogs as Bridges: How Web 2.0 Connects People Across the Ages (and Across Age...
 
Gov 2.0 for Texas Certified Public Manager (CPM ) Program
Gov 2.0 for Texas Certified Public Manager (CPM ) ProgramGov 2.0 for Texas Certified Public Manager (CPM ) Program
Gov 2.0 for Texas Certified Public Manager (CPM ) Program
 
Social it-purchasing-spiceworks-webinar-slides
Social it-purchasing-spiceworks-webinar-slidesSocial it-purchasing-spiceworks-webinar-slides
Social it-purchasing-spiceworks-webinar-slides
 
Investor Relations in the Age of MySpace
Investor Relations in the Age of MySpaceInvestor Relations in the Age of MySpace
Investor Relations in the Age of MySpace
 
Marketing on facebook
Marketing on facebookMarketing on facebook
Marketing on facebook
 
Environmental Health in a Social Media World --Mia Zmud
Environmental Health in a Social Media World --Mia ZmudEnvironmental Health in a Social Media World --Mia Zmud
Environmental Health in a Social Media World --Mia Zmud
 
Take The Leap: Finding the Right Place for Social Media in Your Organizationa...
Take The Leap: Finding the Right Place for Social Media in Your Organizationa...Take The Leap: Finding the Right Place for Social Media in Your Organizationa...
Take The Leap: Finding the Right Place for Social Media in Your Organizationa...
 
Social Media Attribution - Havas Digital Insights
Social Media Attribution - Havas Digital InsightsSocial Media Attribution - Havas Digital Insights
Social Media Attribution - Havas Digital Insights
 
Havas Digital - Social Media Attribution
Havas Digital - Social Media AttributionHavas Digital - Social Media Attribution
Havas Digital - Social Media Attribution
 
FACEBOOK
FACEBOOKFACEBOOK
FACEBOOK
 
The Insidious Plot to Socialize the Enterprise
The Insidious Plot to Socialize the EnterpriseThe Insidious Plot to Socialize the Enterprise
The Insidious Plot to Socialize the Enterprise
 
Engage Influencers: The Social Challenge
Engage Influencers: The Social ChallengeEngage Influencers: The Social Challenge
Engage Influencers: The Social Challenge
 
Social Media Disclosure - Is Now the Time? - June 14, 2011
Social Media Disclosure - Is Now the Time? - June 14, 2011Social Media Disclosure - Is Now the Time? - June 14, 2011
Social Media Disclosure - Is Now the Time? - June 14, 2011
 
Social Media Overview for Business
Social Media Overview for BusinessSocial Media Overview for Business
Social Media Overview for Business
 
Act Presentation Final 02 18 09
Act Presentation Final 02 18 09Act Presentation Final 02 18 09
Act Presentation Final 02 18 09
 
How to make social media work for Investor Relations - January 31, 2012
How to make social media work for Investor Relations - January 31, 2012How to make social media work for Investor Relations - January 31, 2012
How to make social media work for Investor Relations - January 31, 2012
 
Teigland_Exploring future of value creation
Teigland_Exploring future of value creationTeigland_Exploring future of value creation
Teigland_Exploring future of value creation
 

More from coolstuff

Sarah Palin\'s Shopping Spree
Sarah Palin\'s Shopping SpreeSarah Palin\'s Shopping Spree
Sarah Palin\'s Shopping Spree
coolstuff
 
Tatami template
Tatami templateTatami template
Tatami template
coolstuff
 
Tablet template
Tablet templateTablet template
Tablet template
coolstuff
 
Sundays template
Sundays templateSundays template
Sundays template
coolstuff
 
Sumipainting template
Sumipainting templateSumipainting template
Sumipainting template
coolstuff
 
Splats template
Splats templateSplats template
Splats template
coolstuff
 
Sidefade template
Sidefade templateSidefade template
Sidefade template
coolstuff
 
Shadebar template
Shadebar templateShadebar template
Shadebar template
coolstuff
 
World template
World templateWorld template
World template
coolstuff
 
Wetsand template
Wetsand templateWetsand template
Wetsand template
coolstuff
 
Tricolor template
Tricolor templateTricolor template
Tricolor template
coolstuff
 
Travel template
Travel templateTravel template
Travel template
coolstuff
 
Topline template
Topline templateTopline template
Topline template
coolstuff
 
Teched template
Teched templateTeched template
Teched template
coolstuff
 
Sunrise template
Sunrise templateSunrise template
Sunrise template
coolstuff
 
Twinkles template
Twinkles templateTwinkles template
Twinkles template
coolstuff
 
Triumph template
Triumph templateTriumph template
Triumph template
coolstuff
 
Zesty template
Zesty templateZesty template
Zesty template
coolstuff
 
Whrlpool template
Whrlpool templateWhrlpool template
Whrlpool template
coolstuff
 

More from coolstuff (20)

Sarah Palin\'s Shopping Spree
Sarah Palin\'s Shopping SpreeSarah Palin\'s Shopping Spree
Sarah Palin\'s Shopping Spree
 
Tatami template
Tatami templateTatami template
Tatami template
 
Tablet template
Tablet templateTablet template
Tablet template
 
Sundays template
Sundays templateSundays template
Sundays template
 
Sumipainting template
Sumipainting templateSumipainting template
Sumipainting template
 
Splats template
Splats templateSplats template
Splats template
 
Sidefade template
Sidefade templateSidefade template
Sidefade template
 
Shadebar template
Shadebar templateShadebar template
Shadebar template
 
Serene
SereneSerene
Serene
 
World template
World templateWorld template
World template
 
Wetsand template
Wetsand templateWetsand template
Wetsand template
 
Tricolor template
Tricolor templateTricolor template
Tricolor template
 
Travel template
Travel templateTravel template
Travel template
 
Topline template
Topline templateTopline template
Topline template
 
Teched template
Teched templateTeched template
Teched template
 
Sunrise template
Sunrise templateSunrise template
Sunrise template
 
Twinkles template
Twinkles templateTwinkles template
Twinkles template
 
Triumph template
Triumph templateTriumph template
Triumph template
 
Zesty template
Zesty templateZesty template
Zesty template
 
Whrlpool template
Whrlpool templateWhrlpool template
Whrlpool template
 

Recently uploaded

PETAVIT SIP-05.pdfAAAAAAAAAAAAAAAAAAAAAAAAA
PETAVIT SIP-05.pdfAAAAAAAAAAAAAAAAAAAAAAAAAPETAVIT SIP-05.pdfAAAAAAAAAAAAAAAAAAAAAAAAA
PETAVIT SIP-05.pdfAAAAAAAAAAAAAAAAAAAAAAAAA
lawrenceads01
 
Corporate Governance for South African Mining Companies
Corporate Governance for South African Mining CompaniesCorporate Governance for South African Mining Companies
Corporate Governance for South African Mining Companies
James AH Campbell
 
Patrick Dwyer Merrill Lynch - Founder of the Dwyer Family Foundation
Patrick Dwyer Merrill Lynch - Founder of the Dwyer Family FoundationPatrick Dwyer Merrill Lynch - Founder of the Dwyer Family Foundation
Patrick Dwyer Merrill Lynch - Founder of the Dwyer Family Foundation
Patrick Dwyer Merrill Lynch
 
AI at Work​ The demystification of AI and real-world stories on how to apply ...
AI at Work​ The demystification of AI and real-world stories on how to apply ...AI at Work​ The demystification of AI and real-world stories on how to apply ...
AI at Work​ The demystification of AI and real-world stories on how to apply ...
Auxis Consulting & Outsourcing
 
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptxThe-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
Jindal Global University, Sonipat Haryana 131001
 
MEA Union Budget 2024-25 Final Presentation
MEA Union Budget 2024-25 Final PresentationMEA Union Budget 2024-25 Final Presentation
MEA Union Budget 2024-25 Final Presentation
PhysicsUtu
 
1234567891011121314151617181920212223242
12345678910111213141516171819202122232421234567891011121314151617181920212223242
1234567891011121314151617181920212223242
fauzanal343
 
You Get Me! Leveraging Communication Styles in Virtual Trainingpptx
You Get Me! Leveraging Communication Styles in Virtual TrainingpptxYou Get Me! Leveraging Communication Styles in Virtual Trainingpptx
You Get Me! Leveraging Communication Styles in Virtual Trainingpptx
Cynthia Clay
 
Singapore Pharmaceutical Market PPT: Growth, Outlook, Demand, Keyplayer Analy...
Singapore Pharmaceutical Market PPT: Growth, Outlook, Demand, Keyplayer Analy...Singapore Pharmaceutical Market PPT: Growth, Outlook, Demand, Keyplayer Analy...
Singapore Pharmaceutical Market PPT: Growth, Outlook, Demand, Keyplayer Analy...
IMARC Group
 
Gym business MODEL .pdf .
Gym business MODEL .pdf                 .Gym business MODEL .pdf                 .
Gym business MODEL .pdf .
Divyanshu56740
 
Retail Store Scavenger Hunt powerpoint slides
Retail Store Scavenger Hunt powerpoint slidesRetail Store Scavenger Hunt powerpoint slides
Retail Store Scavenger Hunt powerpoint slides
JairSemexant
 
High Profile Girls Call Bhubaneswar 🎈🔥000XX00000 🔥💋🎈 Provide Best And Top Gir...
High Profile Girls Call Bhubaneswar 🎈🔥000XX00000 🔥💋🎈 Provide Best And Top Gir...High Profile Girls Call Bhubaneswar 🎈🔥000XX00000 🔥💋🎈 Provide Best And Top Gir...
High Profile Girls Call Bhubaneswar 🎈🔥000XX00000 🔥💋🎈 Provide Best And Top Gir...
dimplekumaridk322
 
Top Digital Marketing Strategy in 2024.pdf
Top Digital Marketing Strategy in 2024.pdfTop Digital Marketing Strategy in 2024.pdf
Top Digital Marketing Strategy in 2024.pdf
Top IT Marketing
 
Data Analytics and AI Strategy Toolkit, Playbook and Templates
Data Analytics and AI Strategy Toolkit, Playbook and TemplatesData Analytics and AI Strategy Toolkit, Playbook and Templates
Data Analytics and AI Strategy Toolkit, Playbook and Templates
Aurelien Domont, MBA
 
Easy Approval Same Day Emergency Cash Loans for Urgent Situations
Easy Approval Same Day Emergency Cash Loans for Urgent SituationsEasy Approval Same Day Emergency Cash Loans for Urgent Situations
Easy Approval Same Day Emergency Cash Loans for Urgent Situations
EiLoan
 
TALENT ACQUISITION AND MANAGEMENT LECTURE 5
TALENT ACQUISITION AND MANAGEMENT LECTURE 5TALENT ACQUISITION AND MANAGEMENT LECTURE 5
TALENT ACQUISITION AND MANAGEMENT LECTURE 5
projectseasy
 
Cracking the Customer Experience Code.pptx
Cracking the Customer Experience Code.pptxCracking the Customer Experience Code.pptx
Cracking the Customer Experience Code.pptx
Workforce Group
 
Anton Grutzmache- Ominisient: The Data Revolution in Banking: From Scoring Cr...
Anton Grutzmache- Ominisient: The Data Revolution in Banking: From Scoring Cr...Anton Grutzmache- Ominisient: The Data Revolution in Banking: From Scoring Cr...
Anton Grutzmache- Ominisient: The Data Revolution in Banking: From Scoring Cr...
itnewsafrica
 
STEPIC Innovations 2026 futurism publications
STEPIC Innovations 2026 futurism publicationsSTEPIC Innovations 2026 futurism publications
STEPIC Innovations 2026 futurism publications
mcynthus
 
Restaurant Chiraz Sindbad Hotel Hammamet
Restaurant Chiraz Sindbad Hotel HammametRestaurant Chiraz Sindbad Hotel Hammamet
Restaurant Chiraz Sindbad Hotel Hammamet
rihabkorbi24
 

Recently uploaded (20)

PETAVIT SIP-05.pdfAAAAAAAAAAAAAAAAAAAAAAAAA
PETAVIT SIP-05.pdfAAAAAAAAAAAAAAAAAAAAAAAAAPETAVIT SIP-05.pdfAAAAAAAAAAAAAAAAAAAAAAAAA
PETAVIT SIP-05.pdfAAAAAAAAAAAAAAAAAAAAAAAAA
 
Corporate Governance for South African Mining Companies
Corporate Governance for South African Mining CompaniesCorporate Governance for South African Mining Companies
Corporate Governance for South African Mining Companies
 
Patrick Dwyer Merrill Lynch - Founder of the Dwyer Family Foundation
Patrick Dwyer Merrill Lynch - Founder of the Dwyer Family FoundationPatrick Dwyer Merrill Lynch - Founder of the Dwyer Family Foundation
Patrick Dwyer Merrill Lynch - Founder of the Dwyer Family Foundation
 
AI at Work​ The demystification of AI and real-world stories on how to apply ...
AI at Work​ The demystification of AI and real-world stories on how to apply ...AI at Work​ The demystification of AI and real-world stories on how to apply ...
AI at Work​ The demystification of AI and real-world stories on how to apply ...
 
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptxThe-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
The-Three-Pillars-of-Doctoral-Research-What-Why-and-How (1).pptx
 
MEA Union Budget 2024-25 Final Presentation
MEA Union Budget 2024-25 Final PresentationMEA Union Budget 2024-25 Final Presentation
MEA Union Budget 2024-25 Final Presentation
 
1234567891011121314151617181920212223242
12345678910111213141516171819202122232421234567891011121314151617181920212223242
1234567891011121314151617181920212223242
 
You Get Me! Leveraging Communication Styles in Virtual Trainingpptx
You Get Me! Leveraging Communication Styles in Virtual TrainingpptxYou Get Me! Leveraging Communication Styles in Virtual Trainingpptx
You Get Me! Leveraging Communication Styles in Virtual Trainingpptx
 
Singapore Pharmaceutical Market PPT: Growth, Outlook, Demand, Keyplayer Analy...
Singapore Pharmaceutical Market PPT: Growth, Outlook, Demand, Keyplayer Analy...Singapore Pharmaceutical Market PPT: Growth, Outlook, Demand, Keyplayer Analy...
Singapore Pharmaceutical Market PPT: Growth, Outlook, Demand, Keyplayer Analy...
 
Gym business MODEL .pdf .
Gym business MODEL .pdf                 .Gym business MODEL .pdf                 .
Gym business MODEL .pdf .
 
Retail Store Scavenger Hunt powerpoint slides
Retail Store Scavenger Hunt powerpoint slidesRetail Store Scavenger Hunt powerpoint slides
Retail Store Scavenger Hunt powerpoint slides
 
High Profile Girls Call Bhubaneswar 🎈🔥000XX00000 🔥💋🎈 Provide Best And Top Gir...
High Profile Girls Call Bhubaneswar 🎈🔥000XX00000 🔥💋🎈 Provide Best And Top Gir...High Profile Girls Call Bhubaneswar 🎈🔥000XX00000 🔥💋🎈 Provide Best And Top Gir...
High Profile Girls Call Bhubaneswar 🎈🔥000XX00000 🔥💋🎈 Provide Best And Top Gir...
 
Top Digital Marketing Strategy in 2024.pdf
Top Digital Marketing Strategy in 2024.pdfTop Digital Marketing Strategy in 2024.pdf
Top Digital Marketing Strategy in 2024.pdf
 
Data Analytics and AI Strategy Toolkit, Playbook and Templates
Data Analytics and AI Strategy Toolkit, Playbook and TemplatesData Analytics and AI Strategy Toolkit, Playbook and Templates
Data Analytics and AI Strategy Toolkit, Playbook and Templates
 
Easy Approval Same Day Emergency Cash Loans for Urgent Situations
Easy Approval Same Day Emergency Cash Loans for Urgent SituationsEasy Approval Same Day Emergency Cash Loans for Urgent Situations
Easy Approval Same Day Emergency Cash Loans for Urgent Situations
 
TALENT ACQUISITION AND MANAGEMENT LECTURE 5
TALENT ACQUISITION AND MANAGEMENT LECTURE 5TALENT ACQUISITION AND MANAGEMENT LECTURE 5
TALENT ACQUISITION AND MANAGEMENT LECTURE 5
 
Cracking the Customer Experience Code.pptx
Cracking the Customer Experience Code.pptxCracking the Customer Experience Code.pptx
Cracking the Customer Experience Code.pptx
 
Anton Grutzmache- Ominisient: The Data Revolution in Banking: From Scoring Cr...
Anton Grutzmache- Ominisient: The Data Revolution in Banking: From Scoring Cr...Anton Grutzmache- Ominisient: The Data Revolution in Banking: From Scoring Cr...
Anton Grutzmache- Ominisient: The Data Revolution in Banking: From Scoring Cr...
 
STEPIC Innovations 2026 futurism publications
STEPIC Innovations 2026 futurism publicationsSTEPIC Innovations 2026 futurism publications
STEPIC Innovations 2026 futurism publications
 
Restaurant Chiraz Sindbad Hotel Hammamet
Restaurant Chiraz Sindbad Hotel HammametRestaurant Chiraz Sindbad Hotel Hammamet
Restaurant Chiraz Sindbad Hotel Hammamet
 

What should Yahoo do regarding social networks

  • 1. Yahoo!’s 100 Day Review: “What Should Yahoo! Do Regarding Social Networks”? Kunal Madhukar, CFA Victor B. Anthony Lilian Y. Zhou Robert S. Peck, CFA 212-272-6130 212-272-9885 212-272-1509 212-272-6665 kmadhukar@bear.com Victor.Anthony@bear.com lzhou@bear.com rpeck@bear.com ***Bear Stearns does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. ***Customers of Bear Stearns in the United States can receive independent, third-party research on the company or companies covered in this report, at no cost to them,where such research is available. Customers can access this independent research at www.bearstearns.com/independentresearch or can call (800) 517-2327 to request a copy of this research. ***Investors should consider this report as only a single factor in making their investment decision. ***PLEASE READ THE IMPORTANT DISCLOSURE AND ANALYST CERTIFICATION INFORMATION IN THE ADDENDUM SECTION OF THIS REPORT. Confidential August 1st, 2007
  • 2. Executive Summary • 7/17/07 - CEO Jerry Yang declared a “100 day review” of co’s strategic direction. • Mr. Yang stated that nothing was a “sacred cow” • One of the topics we feel the company must be reviewing closely is: Social Networking. • Social networks are growing much faster than the “traditional portals” • The question is will social networks become the new portal? • Our full report assesses the following questions: o How big is the industry? o How fast is it growing? o What are the advertising dollar opportunities? o Who are the players? o What are the companies worth? Confidential 1
  • 3. Why Social Networking Is Important to Yahoo!? We believe it’s a priority for several reasons: 1. Social networking could cause a shift of the portal paradigm 2. Social networking sites may have Ad Dollar Splintering (ADS) effects 3. Social networking sites’ massive user information could be extremely valuable to behavioral targeting (Yahoo!’s SmartAds). a. Higher targetability and CPMs Confidential 2
  • 4. Major Participants Overview There are 4 categories in the social networking space: • Leisure-Oriented Sites: entertainment focused sites, open to all users o MySpace, Facebook, Friendster, Bebo, Orkut, Windows Live Space, Hi5 • Professional Networking Sites: sites focusing on business networking o LinkedIn, itLinkz • Media Sharing Sites: sites focusing on the distribution and consumption of user-generated multi-media content, such as video and photos o YouTube, Flickr • Virtual Meeting Place Sites: sites that are essentially a 3-D virtual world, built and owned by its residents (the users) o Second Life Confidential 3
  • 5. Social Networking – High Profile Already? • Already mainstream – YouTube / CNN Democratic debate (July 2007). Source: YouTube Confidential 4
  • 6. Social Networking (SN) – The New Portal? • Majority of younger users are spending more time (51%) on user-generated sites vs. traditional sites. Percent of Domestic Time Spent Online at User-Generated vs. Traditional Sites Feb.-March 2007 120% 100% 80% 49% 65% 66% 74% 77% 60% 40% 51% 20% 35% 34% 27% 23% 0% Millennials (13- Generation X Baby Boomers Matures (61-75) All respondents 24) (25-41) (42-60) User generated Company generated Source: Deloitte & Touche; eMarketer.com: “User-Generated Content: Will Web 2.0 Pay Its Way?” Confidential 5
  • 7. Social Networking – Not Just the “Kids” • The largest user group is older (35-54 yrs) than most realize (i.e. monetizable) • Mirroring the domestic Internet demographics Total Internet MySpace.com Facebook.com Friendster.com Bebo.com Hi5.com 178,839 70,478 27,965 1,667 4,083 2,914 Unique Visitors (000) Total Audience 100.0 100.0 100.0 100.0 100.0 100.0 Persons 12-17 10.1 6.6 15.2 6.8 27.2 11.1 Persons 18-24 12.0 18.0 26.9 11.2 9.7 16.1 Persons 25-34 16.0 19.4 11.5 21.2 13.6 21.1 38.9 42.3 34.4 44.8 34.8 37.9 Persons 35-54 Persons 55+ 14.8 10.0 6.6 10.7 7.1 8.2 Source: comScore Confidential 6
  • 8. How Big is Social Networking? • In June 2007, domestic visitors were ~115M, representing ~64% of total U.S. Internet users. % YoY Seq. Jun-06 May-07 Jun-07 Reached Growth Growth 100% Total Internet 172,907 177,487 178,839 3% 1% Yahoo! Sites 128,671 130,526 133,093 74% 3% 2% 64% Social Networking N/A 112,150 115,104 NM 3% 1 MYSPACE.COM 52,342 68,939 70,478 39% 35% 2% 2 FACEBOOK.COM 13,752 26,649 27,965 16% 103% 5% 3 8% Classmates.com Sites 13,963 12,103 14,846 6% 23% 4 5% FLICKR.COM 5,913 8,447 9,622 63% 14% 5 5% Windows Live Spaces 8,720 7,998 8,271 -5% 3% 6 4% AOL People Connection 9,324 6,455 7,069 -24% 9% 7 4% Yahoo! Groups 7,745 6,607 6,263 -19% -5% 8 BEBO.COM 1,713 3,711 4,083 2% 138% 10% 9 2% XANGA.COM 6,822 4,039 3,961 -42% -2% 10 2% MSN Groups 5,550 4,024 3,659 -34% -9% 11 2% Yahoo! 360° 4,686 3,797 3,507 -25% -8% 12 2% AIM Pages 333 2,804 3,340 904% 19% 13 HI5 2102 2502 2914 2% 39% 16% 14 FRIENDSTER.COM 1,356 1,654 1,667 1% 23% 1% 15 LINKEDIN.COM 342 1652 1734 1% 407% 5% Source: comScore Confidential 7
  • 9. Social Networking is Growing Faster • The social networking group and certain sites are growing much faster than Yahoo!. % YoY Seq. Jun-06 May-07 Jun-07 Reached Growth Growth 100% Total Internet 172,907 177,487 178,839 3% 1% Yahoo! Sites 128,671 130,526 133,093 74% 3% 2% 64% Social Networking N/A 112,150 115,104 NM 3% 1 MYSPACE.COM 52,342 68,939 70,478 39% 35% 2% 2 FACEBOOK.COM 13,752 26,649 27,965 16% 103% 5% 3 8% Classmates.com Sites 13,963 12,103 14,846 6% 23% 4 5% FLICKR.COM 5,913 8,447 9,622 63% 14% 5 5% Windows Live Spaces 8,720 7,998 8,271 -5% 3% 6 4% AOL People Connection 9,324 6,455 7,069 -24% 9% 7 4% Yahoo! Groups 7,745 6,607 6,263 -19% -5% 8 BEBO.COM 1,713 3,711 4,083 2% 138% 10% 9 2% XANGA.COM 6,822 4,039 3,961 -42% -2% 10 2% MSN Groups 5,550 4,024 3,659 -34% -9% 11 2% Yahoo! 360° 4,686 3,797 3,507 -25% -8% 12 2% AIM Pages 333 2,804 3,340 904% 19% 13 HI5 2102 2502 2914 2% 39% 16% 14 FRIENDSTER.COM 1,356 1,654 1,667 1% 23% 1% 15 LINKEDIN.COM 342 1652 1734 1% 407% 5% Source: comScore Confidential 8
  • 10. Social Networking – It’s Global • It’s a global phenomenon – many sites are growing even faster internationally. % YoY Seq. May-06 Apr-07 May-07 Reached Growth Growth 100% Total Internet 705,644 766,188 771,997 9% 1% Yahoo! Sites 480,200 467,642 469,826 61% -2% 0% 59% Social Networking N/A 431,492 454,132 NM 5% 1 MYSPACE.COM 61,635 104,961 109,535 14% 4% 78% 14% 2 Windows Live Spaces 96,199 108,072 107,279 12% -1% 3 FACEBOOK.COM 14,096 38,764 47,208 6% 235% 22% 4 HI5.COM 20,864 29,345 28,492 4% 37% -3% 3% 5 FLICKR.COM 13,289 23,976 26,781 102% 12% 3% 6 Yahoo! Groups 21,006 24,582 25,615 22% 4% 7 FRIENDSTER.COM 14,175 22,517 24,684 3% 74% 10% 8 Orkut 13,049 22,343 23,104 3% 77% 3% 2% 9 MSN Groups 24,919 18,597 18,398 -26% -1% 10 BEBO.COM 6,135 14,408 17,246 2% 181% 20% 2% 11 Classmates.com Sites 16,681 17,467 16,423 -2% -6% 2% 12 AOL Hometown 17,956 16,525 15,944 -11% -4% Source: comScore Confidential 9
  • 11. Page Views (Inventory) Are Growing Rapidly • Yahoo!’s Domestic PVs are declining (partially due to AJAX), while other sites are exploding. Jun-06 May-07 Jun-07 YoY Growth Seq. Growth Total Internet 492,975 459,025 473,831 -4% 3% Yahoo! Sites 39,680 36,232 34,927 -12% -4% Social Networking N/A 112,150 115,104 NM 3% 1 MYSPACE.COM 30,187 44,402 46,469 54% 5% 2 FACEBOOK.COM 6,093 15,841 14,785 143% -7% 3 BEBO.COM 1,085 1,978 2,201 103% 11% 4 GAIAONLINE.COM 273 777 750 175% -3% 5 Orkut 346 312 455 32% 46% 6 HI5.COM 332 370 394 19% 7% 7 FRIENDSTER.COM 92 361 336 264% -7% 8 Classmates.com Sites 259 290 326 26% 12% 9 Yahoo! Groups 431 379 293 -32% -23% 10 Windows Live Spaces 212 221 244 15% 10% 11 AOL People Connection 247 120 183 -26% 53% 12 FLICKR.COM 80 128 179 124% 40% 13 Yahoo! 360° 208 141 158 -24% 12% 14 XANGA.COM 649 164 155 -76% -6% 15 MSN Groups 213 123 150 -30% 22% 16 LINKEDIN.COM 31 23 26 -16% 13% Source: comScore Confidential 10
  • 12. Global Page Views Are Also Growing Rapidly • Yahoo!’s Global PVs are declining too, while other sites are growing even faster than domestic. May-06 Apr-07 May-07 YoY GrowthSeq. Growth Total Internet 1,828,000 1,925,110 1,944,666 6% 1% Yahoo! Sites 114,432 107,055 106,530 -7% 0% Social Networking N/A 193,498 222,036 NM 15% 1 MYSPACE.COM 28,807 48,911 50,593 76% 3% 2 Orkut 20,204 33,134 34,438 70% 4% 3 FACEBOOK.COM 6,562 26,655 29,882 355% 12% 4 BEBO.COM 2,176 9,396 11,202 415% 19% 5 FRIENDSTER.COM 2,186 6,402 8,990 311% 40% 6 HI5.COM 4,776 7,280 7,192 51% -1% 7 W indows Live Spaces 2,130 2,439 2,226 5% -9% 8 Yahoo! 360° 516 791 913 77% 15% 9 Yahoo! Groups 827 807 764 -8% -5% 10 LINKEDIN.COM 40 49 79 98% 61% Source: comScore Confidential 11
  • 13. SN Users Are Engaging for Longer • Yahoo!’s global MOUs are declining too, while SN’s are seeing robust growth. % YoY May-06 Apr-07 May-07 Reached Growth 100% Total Internet 705,644 766,188 771,997 9% Yahoo! Sites 480,200 467,642 469,826 61% -2% 59% Social Networking N/A 431,492 454,132 NM 1 MYSPACE.COM 61,635 104,961 109,535 14% 78% 14% 2 Windows Live Spaces 96,199 108,072 107,279 12% 3 FACEBOOK.COM 14,096 38,764 47,208 6% 235% 4 HI5.COM 20,864 29,345 28,492 4% 37% 3% 5 FLICKR.COM 13,289 23,976 26,781 102% 3% 6 Yahoo! Groups 21,006 24,582 25,615 22% 7 FRIENDSTER.COM 14,175 22,517 24,684 3% 74% 3% 8 Orkut 13,049 22,343 23,104 77% 2% 9 MSN Groups 24,919 18,597 18,398 -26% 10 BEBO.COM 6,135 14,408 17,246 2% 181% 2% 11 Classmates.com Sites 16,681 17,467 16,423 -2% 2% 12 AOL Hometown 17,956 16,525 15,944 -11% 1% 13 LINKEDIN.COM 1245 3852 4101 229% Source: comScore Confidential 12
  • 14. Geographic Mix Shift is Changing • Facebook and MySpace have had their Unique Visitors base diversify geographically Facebook MySpace 0.20% 100% 100% 16.54% 80% 43.55% 37.06% 80% 60% 60% 99.80% 83.46% 40% 40% 62.94% 56.45% 20% 20% 0% 0% 2006 2007 2006 2007 Domestic International Domestic International Source: comScore Confidential 13
  • 15. How Big is the Advertising Market? • U.S. User-Generated Content Advertising Revenues - est. $4.3B by 2011, 43% CAGR. 5,000 140% 132% 4,303 4,500 120% 4,000 100% 3,500 3,292 3,000 80% 68% 2,477 2,500 60% 2,000 1,748 42% 33% 31% 1,500 40% 1,042 1,000 20% 450 500 0 0% 2006 2007 2008 2009 2010 2011 Source: eMarketer.com: “User-Generated Content: Will Web 2.0 Pay Its Way?” Confidential 14
  • 16. How Big is the Advertising Market? • Global User-Generated Content Advertising Revenues – est. $8.2B. 9,000 160% 8,175 148% 8,000 140% 7,000 120% 5,925 6,000 100% 5,000 79% 4,210 80% 4,000 2,796 51% 60% 3,000 41% 38% 1,562 40% 2,000 630 20% 1,000 - 0% 2006 2007 2008 2009 2010 2011 Source: eMarketer.com: “User-Generated Content: Will Web 2.0 Pay Its Way?” Confidential 15
  • 17. SN’s to Reach ~12% of Online Advertising? • Social Networking Advertising Revenues as a Percentage of Online Advertising Spend. 14% 11.8% 12% 10.2% 10% 8.8% 7.3% 8% 5.3% 6% 4% 2.7% 2% 0% 2006 2007 2008 2009 2010 2011 Source: eMarketer.com: “User-Generated Content: Will Web 2.0 Pay Its Way?” Confidential 16
  • 18. Who’s Actually Advertising Today? • Major brands have already gotten comfortable with social networks. Exhibit Marketers & Advertisers that have Employed UG and Viral Video Advertising Ban (deodorant) Jet Blue Blendtec L'Oreal Cadillac M&M's Chevrolet Tahoe Mastercard Chrysler Mentos Converse Ray Ban Coca-Cola Smirnoff Doritos Sony Dove Toyota Geico Volkswagon Source: emarketer.com Confidential 17
  • 19. How are budgets growing? Exhibit U.S. Online Marketers’ Planned Spending on Emerging Advertising Tactics (% of respondents) 2005 (predicted 2006 (budgeted 2006 use) for 2007) Ads on third-party blogs and blog networks 30% 42% Social networking N/A 40% Adding RSS feeds 40% 37% Video ads 27% 37% Sponsoring podcasts 14% 18% Mobile/wireless 20% 16% Ads in RSS feeds 21% 15% Product placement in video games 10% 9% Source: MarketingSherpa Inc; eMarketer.com: “User-Generated Content: Will Web 2.0 Pay Its Way?” Confidential 18
  • 20. Social Networking – The New Portal? • Social networking sites are taking on the new role of disseminating public information by: Adding “special channel” / portal-like features that are very timely and targeted. • • MySpace’s launch of the Impact channel for 2008 Presidential election • Many presidential candidates have profiles on Facebook • Youtube has the “YouChoose ‘08” campaign that allows users to get to know candidates through their videos. • Youtube also teamed up with CNN for the CNN YouTube debates, which recently aired on July 23, 2007 • Developer platform – F8 • Users can tie data from outside of the Social Networking Ecosystem to their profiles • i.e. weather, music, horoscopes, news • Can dampen user visits to traditional portals for basic needs Confidential 19
  • 21. The Ad Dollar Splintering (ADS) Effect • New advertising channels that entice advertising dollars away – the Ad Dollar Splintering (ADS) effect o Additional industry page view inventory; could put pressure on CPMs • Use the evolution of television as a parallel to understand how increased choices may affect consumption (analysis done by Spencer Wang, Bear Stearns Cable and Entertainment Analyst.) 100% Other (1) 26.3 26.2 27.1 26.9 27.5 27.7 27.6 27.3 27.3 27.3 27.9 28.0 27.8 28.2 27.7 29.2 28.9 29.3 28.9 80% Share of Total Day TV Viewing 11.8 13.8 16.2 19.5 23.4 22.7 24.4 24.6 60% 28.1 30.3 32.7 35.0 Ad- 36.7 38.1 41.1 44.3 45.4 46.5 Supported 48.3 Cable 40% 60.7 57.0 54.9 52.6 50.3 50.2 49.4 48.5 43.9 42.0 20% 39.5 37.4 34.0 33.0 30.7 28.4 26.8 26.2 Big 3 24.4 0% 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 Source: Bear Stearns & Co., Inc. Confidential 20
  • 22. SN’s Could Augment Behavioral Targeting We believe the vast amount of personal information on social networking sites could significantly aid Yahoo!’s behavioral targeting initiatives: • Yahoo! recently soft launched SmartAds o Deliver more targeted display advertising to its users, using demographic and behavioral data o Reinvigorate the growth of branded display advertising • Yahoo! can fully leverage social networking sites’ massive database of user information to better compete with Google o One of the reasons for Google’s DoubleClick acquisition was to help it better target display advertising. Confidential 21
  • 23. Who Are the Potential Acquisition Candidates? - Facebook • Yahoo! has a high concentration of international visitors; Facebook has a stronger domestic mix of 57%. • Facebook’s stellar growth helps Yahoo!’s declining traffic Yahoo vs. Facebook Unique Visitor International and Domestic Mix International International Domestic YoY Mix Domestic Mix YoY Growth Growth Yahoo 72.0% 28.0% -3% 0.3% Facebook 43.6% 56.5% 74297% 89% Source: comScore •Yahoo! and Facebook could complement traffic and viewership on opposite ends Yahoo vs. Facebook Percent (%) Unique Visitor Composition Persons 12-17 Persons 18-24 Persons 25-34 Persons 35-54 Persons 55+ Yahoo 9.8% 12.3% 17.4% 39.6% 13.8% Facebook 15.2% 26.9% 11.5% 34.4% 6.6% Source: comScore Confidential 22
  • 24. What Should Yahoo! Pay – FaceBook Valuation • Illustrative analysis only • Should depict of HOW we think Yahoo! would look at it •Yahoo! management should have more refined information • Focuses only on display revenues; not incremental revs from search or premium services • Investors can use this as a roadmap Confidential 23
  • 25. What Should Yahoo! Pay – FaceBook Valuation We believe price could have been the major deterrent to Yahoo!’s past pursuit in the space. Below is our attempt to build out the projections; investors can tweak assumptions on their own understanding. • Revenue Drivers: • Social Networking 84% and 25% of Internet UVs and PVs vs. Portals of 90% and 25% today • Page Views: • Estimate PV to grow from 265 billion in 2007 to 1.6 trillion in 2016. • Currently growing ~200%, but we expect growth rate to decelerate significantly over the next nine years. • Estimate FB PV to comprise 5.5% of total Internet PV in 2016 - Yahoo currently accounts for 5.5% of global PV. • Monetized Page Views: • We sampled a significant amount of pages on Facebook • North of 60% of pages are being monetized. For conservatism, we use 60% monetization rate • Expect this percentage to increase to ~70% in 2016. • Prime Ad Revenues: • Estimate prime page views as a % of total to reach 10% in 2007 and grow to 20% in 2016. • Estimate Prime CPM to amount to ~$4 based on conversation with industry contacts and grow to ~$18 in 2016. • Remnant Ad Revenues: • Estimate remnant page views as a % of total to reach 90% in 2007 and steadily declining to comprise 80% in 2016 • Estimate Remnant CPM of ~$0.50, based on industry estimates and increase steadily to ~$2 in 2016. • EBITDA Estimates: Assuming EBITDA margins of close to high 20%s growing to high 30%s Confidential 24
  • 26. What Should Yahoo! Pay – FaceBook Valuation (Cont’d) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Internet Users - EOP (000) 740,984 815,082 880,289 924,303 961,275 999,726 1,029,718 1,060,609 1,081,822 1,103,458 1,125,527 Global Social Networking Users - EOP (000) 381,753 572,630 732,966 828,252 869,665 895,754 913,670 922,806 932,034 941,355 950,768 FACEBOOK Facebook Visitors - EOP (000) 22,753 50,056 82,593 107,371 128,845 148,171 165,952 182,547 197,151 208,980 219,429 % YoY Growth 120% 65% 30% 20% 15% 12% 10% 8% 6% 5% % Penetration of Internet Users 6% 9% 12% 13% 15% 16% 17% 18% 19% 19% % Penetration of SNUs 9% 11% 13% 15% 17% 18% 20% 21% 22% 23% Page Views (in MM) 88,201 264,604 502,748 703,848 879,810 1,055,772 1,214,138 1,335,551 1,442,395 1,528,939 1,605,386 % YoY Growth 200% 90% 40% 25% 20% 15% 10% 8% 6% 5% % of Social Netowrking PVs 6% 8% 11% 12% 14% 16% 18% 20% 21% 21% 22% % of Internet PVs 0.4% 1.2% 2.1% 2.9% 3.5% 4.0% 4.5% 4.8% 5.1% 5.3% 5.5% Page Views Utilization 60.0% 62.0% 63.5% 65.0% 66.5% 68.0% 69.5% 71.0% 71.0% 71.0% Monetized Page Views (in MM) 158,763 311,704 446,943 571,876 702,088 825,614 928,208 1,024,101 1,085,547 1,139,824 Prime Page Views (in MM) 15,876 37,404 62,572 91,500 126,376 165,123 185,642 204,820 217,109 227,965 % of Total Monetized Page Views 10% 12% 14% 16% 18% 20% 20% 20% 20% 20% Prime CPM $4.30 $5.16 $6.15 $7.28 $8.53 $9.92 $11.53 $13.40 $15.58 $18.11 % YoY Growth 20% 19% 18% 17% 16% 16% 16% 16% 16% Prime Ad Revenues $68,267,947 $193,007,140 $385,024,729 $665,780,950 $1,078,167,592 $1,637,652,804 $2,140,342,976 $2,745,197,742 $3,382,769,918 $4,129,093,531 Remnant Page Views 142,886 274,300 384,371 480,376 575,712 660,491 742,566 819,281 868,437 911,859 % of Total Monetized Page Views 90% 88% 86% 84% 82% 80% 80% 80% 80% 80% Remnant CPM $0.50 $0.60 $0.72 $0.85 $0.99 $1.15 $1.34 $1.56 $1.81 $2.11 % YoY Growth 20% 19% 18% 17% 16% 16% 16% 16% 16% Remnant Ad Revenues $71,443,200 $164,579,732 $275,017,664 $406,436,045 $571,122,368 $761,698,979 $995,508,361 $1,276,836,159 $1,573,381,357 $1,920,508,619 Total Ad Revenues $139,711,147 $357,586,872 $660,042,393 $1,072,216,996 $1,649,289,959 $2,399,351,783 $3,135,851,337 $4,022,033,901 $4,956,151,275 $6,049,602,150 EBITDA $39,119,121 $108,706,409 $213,853,735 $358,120,477 $567,355,746 $849,370,531 $1,141,449,887 $1,504,240,679 $1,903,162,089 $2,323,047,225 EBITDA Margin % 28% 30% 32% 33% 34% 35% 36% 37% 38% 38% % YoY Growth 178% 97% 67% 58% 50% 34% 32% 27% 22% - Tax (@ 20% Revs) 71,624,095 113,471,149 169,874,106 228,289,977 300,848,136 380,632,418 464,609,445 - Capex (10% Revs) $13,971,115 $35,758,687 $66,004,239 $107,221,700 $164,928,996 $239,935,178 $313,585,134 $402,203,390 $495,615,127 $604,960,215 = ~ Free Cash Flows $25,148,007 $72,947,722 $147,849,496 $179,274,682 $288,955,601 $439,561,247 $599,574,776 $801,189,153 $1,026,914,544 $1,253,477,565 Confidential Source: Bear Stearns & Co., Inc. 25
  • 27. What Should Yahoo! Pay – FaceBook Valuation (Cont’d) • DCF Suggest $5-$6B • WACC 17%, 10x Terminal Multiple • 45x EBITDA multiple supports valuation • Recent AQNT and DoubleClick multiples 41x and 45x, respectively • Sensitivity analysis • $4.5b- $7b . WACC 15% 16% 17% 18% 19% $5,768 $3.50 $6,469 $5,606 $5,041 $4,348 $3,878 $4.00 $6,112 $5,496 $4,740 $7,053 $4,227 Prime CPM $4.30 $6,415 $5,768 $4,974 $7,403 $4,436 $5.00 $7,123 $6,404 $5,522 $8,220 $4,924 $5.50 $8,804 $7,628 $6,858 $5,913 $5,273 EBITDA Multiple 40.0x 42.0x 45.0x 48.0x 50.0x $4,892 $3.50 $3,912 $4,107 $4,401 $4,694 $4,890 $4.00 $4,394 $4,708 $5,021 $4,185 $5,231 Prime CPM $4.30 $4,566 $4,892 $5,218 $4,348 $5,435 $5.00 $4,967 $5,322 $5,676 $4,730 $5,913 $5.50 $5,003 $5,253 $5,629 $6,004 $6,254 Source: Bear Stearns & Co., Inc. Confidential 26
  • 28. New Trends – Mobile Opportunity • Mobile is the next leg of growth for social networking – Allow users to access social networking sites anywhere in real-time, which could increase the amount of time users spend on these sites – GPS enabled devices adds real world dimension - enable users to keep friends updated on his or her location. • Examples of social networking sites that have begun to go mobile include Twitter.com and Bliin.com • Mobile Internet penetration is still low (17% of the current wireless subscribers also subscribe to mobile Internet services), allowing more room for growth • In 2006, the mobile advertising market estimated to be around $1.5 billion • There are currently 2.6 billion cell phone subscribers in the world and are expected to reach 3.8 billion in 2010 Confidential 27
  • 29. Issues • Regulation of Security – Scammers use easily accessible information to mislead members into providing private information – Distribution of links and attachments that contain harmful content • Valuable Tools for Employers/Universities – Employers are using social networks to evaluate potential employees – Universities, such as the U.K.’s Oxford, use social networking sites to track behavior of students – Raise question of privacy and confidentiality • Banning Social Networking in the Workplace – Businesses are blocking social networking sites because they feel they disrupt employee productivity – Sites create problems with spam and viruses • Sexual Predators – Registered sex offenders use memberships on social networking sites to befriend younger users – July 2007- MySpace released and deleted profiles of 29,000 members who are registered sex offenders Confidential 28
  • 30. Conclusions 1. Social Networking is growing and here to stay 2. SN’s could become the new portals a) Yahoo! risks being potentially marginalized 3. SN’s can be monetized 4. Large market opportunity 5. Yahoo! needs a stronger presence in SNs 6. Acquisitions make sense a) Valuations may seem large, but justified 7. Mobile – could present next leg of growth Confidential 29
  • 31. Questions? Confidential 30
  • 32. ADDENDUM IMPORTANT DISCLOSURES ANALYST CERTIFICATION The research analyst(s) primarily responsible for the preparation of this research report hereby certify that all of the views expressed in this research report accurately reflect their personal views about any and all of the subject securities or issuers.The research analyst(s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. Robert Peck Lead Analyst Name Yahoo! Corp.[YHOO]: Bear, Stearns & Co. Inc. is a market maker in this company's equity securities. Yahoo! Corp.[YHOO]: Within the past twelve (12) months, Bear, Stearns & Co. Inc. or one of its affiliates has received non-investment banking compensation from this company. Yahoo! Corp.[YHOO]: The subject company is or during the past twelve (12) months has been a non-investment banking client (securities related services) of Bear Stearns & Co. Inc. For the Bear, Stearns recommendation history of rated companies in this report, please visit: http://www.bearstearns.com/charts/getchart.htm?symbol=YHOO The costs and expenses of Equity Research, including the compensation of the analyst(s) that prepared this report, are paid out of the Firm's total revenues, a portion of which is generated through investment banking activities. This report has been prepared in accordance with the Firm's conflict management policies. Bear Stearns is unconditionally committed to the integrity, objectivity, and independence of its research. Bear Stearns research analysts and personnel report to the Director of Research and are not subject to the direct or indirect supervision or control of any other Firm department (or members of such department). This publication and any recommendation contained herein speak only as of the date hereof and are subject to change without notice. Bear Stearns and its affiliated companies and employees shall have no obligation to update or amend any information or opinion contained herein, and the frequency of subsequent publications, if any, remain in the discretion of the author and the Firm. Confidential
  • 33. Bear, Stearns & Co. Inc. Equity Research Rating System: Ratings for Stocks (vs. analyst coverage universe): Outperform (O) - Stock is projected to outperform analyst's industry coverage universe over the next 12 months. Peer Perform (P) - Stock is projected to perform approximately in line with analyst's industry coverage universe over the next 12 months. Underperform (U) - Stock is projected to underperform analyst's industry coverage universe over the next 12 months. Ratings for Sectors (vs. regional broader market index): Market Overweight (MO) - Expect the industry to perform better than the primary market index for the region (S&P 500 in the US) over the next 12 months. Market Weight (MW) - Expect the industry to perform approximately in line with the primary market index for the region (S&P 500 in the US) over the next 12 months. Market Underweight (MU) - Expect the industry to underperform the primary market index for the region (S&P 500 in the US) over the next 12 months. Robert Peck,Consumer Internet : Amazon.Com,Baidu.com,Bankrate,Ebay Inc.,Expedia, Inc.,GSI Commerce,Google,IAC/InterActiveCorp.,Liberty Interactive,Vistaprint Ltd.,Yahoo! Corp. Bear, Stearns & Co. Inc. Ratings Distribution as of June 30, 2007: Percentage of BSC universe with this rating / Percentage of these companies which were BSC investment banking clients in the last 12 months. Outperform (Buy): 42.6 / 15.8 Peer Perform (Neutral): 49.8 / 11.1 Underperform (Sell): 7.6 / 7.5 OTHER DISCLAIMERS This report has been prepared by Bear, Stearns & Co. Inc., Bear, Stearns International Limited or Bear Stearns Asia Limited (together with their affiliates, quot;Bear Stearnsquot;), as indicated on the cover page hereof. Responsibility for the content of this report has been accepted by Bear, Stearns & Co. Inc. for distribution in the United States. If you are a recipient of this publication in the United States, orders in any securities referred to herein should be placed with Bear, Stearns & Co. Inc. This report has been approved for publication in the United Kingdom by Bear, Stearns International Limited, which is authorized and regulated by the United Kingdom Financial Services Authority. Private Customers in the U.K. should contact their Bear, Stearns International Limited representatives about the investments concerned. This report is distributed in Hong Kong by Bear Stearns Asia Limited, which is regulated by the Securities and Futures Commission of Hong Kong. Recipients of this report from Bear Stearns Asia Limited should contact representatives of the latter in relation to any matter referred to herein. Additional information is available upon request. Confidential
  • 34. Bear Stearns and its employees, officers, and directors deal as principal in transactions involving the securities referred to herein (or options or other instruments related thereto), including in transactions which may be contrary to any recommendations contained herein. Bear Stearns and its employees may also have engaged in transactions with issuers identified herein. Bear Stearns is affiliated with a specialist that may make a market in the securities of the issuers referred to in this document, and such specialist may have a position (long or short) and may be on the opposite side of public orders in such securities. This publication does not constitute an offer or solicitation of any transaction in any securities referred to herein. Any recommendation contained herein may not be suitable for all investors. Although the information contained in the subject report (not including disclosures contained herein) has been obtained from sources we believe to be reliable, the accuracy and completeness of such information and the opinions expressed herein cannot be guaranteed. This publication and any recommendation contained herein speak only as of the date hereof and are subject to change without notice. Bear Stearns and its affiliated companies and employees shall have no obligation to update or amend any information or opinion contained herein. This publication is being furnished to you for informational purposes only and on the condition that it will not form the sole basis for any investment decision. Each investor must make their own determination of the appropriateness of an investment in any securities referred to herein based on the tax, or other considerations applicable to such investor and its own investment strategy. By virtue of this publication, neither Bear Stearns nor any of its employees, nor any data provider or any of its employees shall be responsible for any investment decision. This report may not be reproduced, distributed, or published without the prior consent of Bear Stearns. ©2007. All rights reserved by Bear Stearns. Bear Stearns and its logo are registered trademarks of The Bear Stearns Companies Inc. This report may discuss numerous securities, some of which may not be qualified for sale in certain states and may therefore not be offered to investors in such states. This document should not be construed as providing investment services. Investing in non-U.S. securities including ADRs involves significant risks such as fluctuation of exchange rates that may have adverse effects on the value or price of income derived from the security. Securities of some foreign companies may be less liquid and prices more volatile than securities of U.S. companies. Securities of non-U.S. issuers may not be registered with or subject to Securities and Exchange Commission reporting requirements; therefore, information regarding such issuers may be limited. NOTE TO ACCOUNT EXECUTIVES: For securities that are not listed on the NYSE, AMEX, or Nasdaq National Market System, check the Compliance page of the Bear Stearns Intranet site for State Blue Sky data prior to soliciting or accepting orders from clients. CIR 230 Disclaimer Bear Stearns does not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. In order for Bear Stearns to comply with Internal Revenue Service Circular 230 (if applicable), you are notified that any discussion of U.S. federal tax issues contained or referred to herein is not intended or written to be used, and cannot be used, for the purpose of: (A) avoiding penalties that may be imposed under the Internal Revenue Code; nor (B) promoting, marketing or recommending to another party any transaction or matter discussed herein. Confidential