Who is Yahoo?

Yahoo! Internet Portal

 Yahoo! is one of the world's leading Internet portals offering games, free email, the web's second largest search engine, and a wide variety of other products. One of the omnipresent dot.com companies that made good, its stock trades on the NASDAQ with a market capitalization of $48.5 billion, and it sports a price/earnings ratio of about 60 times earnings. Revenues in 2004 amounted to about $3.5 billion, with net income of about $840 million.

In January 2005 Yahoo! announced a new strategic venture with exchange betting giant Betfair, which could add substantially to earnings.

This is Yahoo's summary of its business in its most SEC filing on Form 10-K:
Yahoo! Inc., together with its consolidated subsidiaries, is a leading provider of comprehensive Internet products and services to consumers and businesses through our worldwide network of online properties (the "Yahoo! network")?

Headquartered in Sunnyvale, California, we have offices in North America, Europe, Asia, Latin America and Australia. We manage our business geographically; our principal areas of measurement and decision-making are the United States and International. Our properties and services for consumers and businesses currently reside in four areas: Search and Marketplace; Information and Content; Communications and Consumer Services; and Affiliate Services. Our basic products and service offerings are available without charge to our users. We also offer a variety of fee-based premium services that provide our users access to value-added content or services. In addition, we sell marketing and advertising services to businesses across the majority of our properties and services...

We generate multiple sources of revenue across these properties and services that are classified as: Marketing Services, Fees and Listings. The following table presents an overview of our financial reporting structure as well as our properties and services.

Breakdown of revenues (dollars in 000s) for these categories for 2003 as compared to 2002:

According to the information in the Form 10-K:
Marketing services revenue is primarily generated from the sale of rich media advertisements, sponsorship and text-link advertisements, (including pay-for-performance search advertisements), paid inclusion, algorithmic searches and transactions revenue. The increase in marketing services in 2003 compared to 2002 was due to incremental revenue contribution from our 2003 acquisitions and strong growth in the balance of Yahoo's global legacy (non-acquisition related) marketing services revenue. For the year ended December 31, 2003, approximately 74 percent of our total revenues came from marketing services.

Fees revenue is generated from a variety of consumer and business fee-based services. Fees revenue increased in 2003 when compared to 2002 due to an increase in the number of paying users for our fee-based services, from approximately 2.2 million paying users at December 31, 2002 to approximately 4.9 million paying users at December 31, 2003. Average revenue per paying user per month declined from approximately $7 per user per month in 2002 to approximately $5 per user per month in 2003 as a result of faster subscriber growth in some of the lower priced offerings, and the introduction of lower priced fee-based products offered in 2003.

Listings revenue consists of revenues generated from a variety of consumer and business listings-based services. Listings revenue increased as compared to the prior year, primarily from our Search and Marketplace listings.

The combination of the innovative, low-cost wagering method pioneered by Betfair with the enormous mass market reach of Yahoo! could soon result in creating the world?s largest online sports betting operation. Yahoo?s share of the earnings from this strategic venture could provide a material increase in Yahoo?s revenue and earnings for 2005 and beyond.