Yahoo Inc.

NASDAQ:YHOO

Main events in 2008

The „Microsoft Offer“ fiasco

• Microsoft offered $44.6 bln for Yahoo• … $31/share• … +60% of the market price (Jan 08)• … management refused the offer

The merge – Microsoft’s revenueRevenue source $ billions

Games & mobile 6.1

Servers & licenses 11.2

Windows 15.0

Office 16.4

MSN/Online 2.5

MSN• Flat growth rate• Burns cash• Ad network: 1/8 of Google’s, 1/3 of Yahoo’s

Yahoo price per share

Share price

• 60% premium• Can it be rejected?• (GUESS)

Microsoft: desperation, no Plan B

Search volumeSE 2007/8 2007/9 2007/10 2007/11 2007/12

Google 56,5 57 58,4 58,6 58,4

Yahoo 23,3 23,7 22,8 22,4 22,9

Some ratios

• Looks like serious shortage of advertisers or users

Low margin

• Looks like serious shortage of advertisers or users

Balance sheet (millions)

• $44 bln seems like a good deal…

Profits

Strength

Sales

Management effectiveness

Summary

• Good, healthy company• ..that makes products that only few people

wont• Google is the one who “gets it”

Sources

• Google Finance (not Yahoo Finance…)• www.reuters.com/finance/stocks/ratios• www.lupa.cz