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					          Yahoo! Inc.
Q4’12 Financial Highlights
                1.28.2013
This presentation contains forward-looking statements concerning Yahoo!’s expected financial performance and Yahoo!’s strategic and operational plans. Risks and uncertainties
may cause actual results to differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks
and uncertainties include, among others, the impact of changes to our management, organizational structure and strategic business plan; Yahoo!'s ability to compete with new or
existing competitors; reduction in spending by, or loss of, advertising customers; risks associated with the Search and Advertising Services and Sales Agreement (the “Search
Agreement”) between Yahoo! and Microsoft Corporation (“Microsoft”); risks related to Yahoo!’s regulatory environment; interruptions or delays in the provision of Yahoo!’s services;
security breaches; acceptance by users of new products and services; risks related to joint ventures and the integration of acquisitions; risks related to Yahoo!'s international
operations; adverse results in litigation; Yahoo!'s ability to protect its intellectual property and the value of its brands; dependence on third parties for technology, services, content,
and distribution; and general economic conditions. All information in this presentation is as of January 28, 2013. Yahoo! does not intend, and undertakes no duty, to update this
information to reflect subsequent events or circumstances; however, Yahoo! may update its business outlook, or any portion thereof, at any time in its discretion. More information
about potential risk factors that could affect Yahoo!’s business and financial results is included in Yahoo!’s filings with the Securities and Exchange Commission (“SEC”) including
its Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, which is available on the SEC’s web site at www.sec.gov.



Throughout this presentation, we have rounded numbers as appropriate. In this presentation, “year-over-year” (or YOY) refers to the change from the corresponding period in the
prior fiscal year to the specified period in the specified year; and “quarter-over-quarter” (or QOQ) refers to the change from the immediately preceding fiscal quarter to the specified
quarter.



We periodically review and refine our methodologies for monitoring, gathering, and counting paid clicks and sold impressions. Based on this process, from time to time we may
update such methodologies.



Yahoo! and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.




                                                                                            2
Definitions and Non-GAAP Financial Measures

This presentation includes the following non-GAAP financial measures:

- Revenue ex-TAC is defined as GAAP Revenue less Traffic acquisition costs (TAC). TAC consists of payments to Affiliates and payments made to companies that direct
consumer and business traffic to Yahoo! Properties.

- Display revenue ex-TAC is defined as GAAP Display revenue less Display TAC. Search revenue ex-TAC is defined as GAAP Search revenue less Search TAC. Other
revenue ex-TAC is defined as GAAP Other revenue less Other TAC.

- Total operating expenses less TAC is defined as GAAP Total operating expenses excluding TAC.

- Non-GAAP Total operating expenses is defined as GAAP Total operating expenses excluding TAC and certain other expenses that we do not believe are indicative of our
ongoing operating expenses.

- Free cash flow is defined as Net cash provided by (used in) operating activities (adjusted to include Excess tax benefits from stock-based awards), less Acquisition of property
and equipment, net and Dividends received from equity investees.

- Adjusted EBITDA is defined as net income attributable to Yahoo! Inc. before taxes, depreciation, amortization of intangible assets, stock-based compensation expense, other
income, net (which includes interest), earnings in equity interests, net income attributable to noncontrolling interests and other gains, losses, and expenses that we do not believe
are indicative of our ongoing results.

- Non-GAAP Operating income is defined as Operating income excluding certain gains, losses, and expenses that we do not believe are indicative of our ongoing operating
results.

- Non-GAAP Net earnings is defined as Net income attributable to Yahoo! Inc. excluding certain gains, losses, expenses, and their related tax effects that we do not believe are
indicative of our ongoing results.

Please refer to the Appendix for reconciliations of these non-GAAP financial measures to the GAAP financial measures the Company considers most comparable.



In addition, certain margin information is presented on a non-GAAP basis:

- Operating margin ex-TAC is calculated as Operating income divided by Revenue ex-TAC; and

- Non-GAAP Operating margin ex-TAC is calculated as Non-GAAP operating income divided by Revenue ex-TAC.

- Net margin ex-TAC is calculated as Net income attributable to Yahoo! Inc. divided by Revenue ex-TAC.

Please refer to the Appendix for presentations of the most comparable margins calculated on a GAAP basis.



Please refer to the Company’s earnings release for definitions of other terms appearing in this presentation, and for more information regarding the Company’s non-GAAP financial
measures.




                                                                                        3
Key Takeaways From Q4’12
 Revenue ex-TAC of $1,221 million grew 4% in the quarter on a YOY
  basis.

 Search revenue ex-TAC of $427 million increased 14% in the quarter
  on a YOY basis.

 Adjusted EBITDA of $509 million increased 8% in the quarter on a
  YOY basis.

 Non-GAAP Operating Income of $283 million increased 9% in the
  quarter on a YOY basis.

 We repurchased 79.6 million shares of stock at an average price of
  $18.24 for $1.45 billion in the fourth quarter.


                                  4
 Financials and Key Metrics at a Glance
 $ in millions, except per share amounts                                           Q4’11   Q4’12     YOY

 GAAP Revenue                                                                  $1,324      $1,346     2%
 Revenue ex-TAC                                                                $1,169      $1,221     4%
 Adjusted EBITDA                                                                   $469    $509       8%
 Operating income                                                                  $242    $190      (22%)
 Operating margin ex-TAC                                                           21%      16%     (500bps)
 Non-GAAP Operating income                                                         $259    $283       9%
 Non-GAAP Operating margin ex-TAC                                                  22%      23%     100bps
 Net income attributable to Yahoo! Inc.                                            $296    $272      (8%)
 Net margin ex-TAC                                                                 25%      22%     (300bps)
 EPS attributable to Yahoo! Inc. – diluted                                         $0.24   $0.23     (2%)
 Non-GAAP EPS – diluted                                                            $0.25   $0.32     28%
 Shares used in per share calculation – diluted                                    1,241   1,168     (6%)

 Acquisition of property and equipment, net                                        $130    $150      15%
 Free cash flow, as adjusted(1)                                                    $327    $221      (32%)
 Cash & marketable debt securities                                             $2,530      $6,022     N/M
 Ending employees                                                              14,100      11,500    (18%)



N/M – Not meaningful
(1)   See slide 27 for the reconciliation of Free cash flow and adjustments.


                                                                               5
 Financials and Key Metrics at a Glance
 $ in millions, except per share amounts                                           2011    2012      YOY

 GAAP Revenue                                                                  $4,984      $4,987     0%
 Revenue ex-TAC                                                                $4,381      $4,468     2%
 Adjusted EBITDA                                                               $1,655      $1,699     3%
 Operating income                                                                  $800    $566      (29%)
 Operating margin ex-TAC                                                           18%      13%     (500bps)
 Non-GAAP Operating income                                                         $825    $825       0%
 Non-GAAP Operating margin ex-TAC                                                  19%      18%     (100bps)
 Net income attributable to Yahoo! Inc.                                        $1,049      $3,945     N/M
 Net margin ex-TAC                                                                 24%      88%       N/M
 EPS attributable to Yahoo! Inc. – diluted                                         $0.82   $3.28      N/M
 Non-GAAP EPS – diluted                                                            $0.81   $1.17     44%
 Shares used in per share calculation – diluted                                    1,282   1,203     (6%)

 Acquisition of property and equipment, net                                        $593    $506      (15%)
 Free cash flow, as adjusted(1)                                                    $726    $1,431    97%




N/M – Not meaningful
(1)   See slide 27 for the reconciliation of Free cash flow and adjustments.


                                                                               6
        Search and Display Metrics
      YOY % Growth                                                             Q1’11            Q2’11            Q3’11             Q4’11           Q1’12            Q2’12            Q3’12            Q4’12

      Global Search(1) (2)

        Number of Paid Clicks(3)                                               (27%)            (28%)            (26%)             (18%)              2%               6%              9%                 11%

        Price-Per-Click (“PPC”)(4)                                                10%              9%               5%               0%               3%             (1%)              1%                 1%

      Global Display(1) (5)

        Number of Ads Sold(6)                                                     7%               1%             (1%)             (6%)            (18%)            (11%)            (11%)            (10%)

        Price-Per-Ad(7)                                                           11%              4%             (3%)               0%             13%              14%              12%                 7%

                                 Global Search Trends                                                                                                Global Display Trends
      15%                                                                              11%                           20%
                 10%        9%                                               9%
      10%                                                                                                                                                                    13%        14%
                                       5%                         6%                                                 15%                                                                           12%
                                                                                                                                   11%
       5%                                              2% 3%                      1%       1%                        10%
                                                 0%                                                                           7%                                                                               7%
       0%                                                                                                                                1% 4%
                                                                                                                       5%
              Q1'11      Q2'11     Q3'11      Q4'11     Q1'12      Q2'12     Q3'12      Q4'12                                                                       0%
      -5%
                                                                     -1%                                               0%
      -10%                                                                                                                     Q1'11      Q2'11      Q3'11     Q4'11      Q1'12      Q2'12      Q3'12      Q4'12
                                                                                                                      -5%
      -15%                                                                                                                                          -1% -3%
                                                                                                                     -10%                                     -6%
      -20%                                  -18%
                                                                                                                                                                                   -11%       -11%        -10%
      -25%                                                                                                           -15%

      -30% -27%                   -26%                                                                               -20%
                       -28%                                                                                                                                              -18%
                         Number of Paid Clicks          Price-Per-Click                                                                           Number of Ads Sold         Price-Per-Ad
(1)    Source: Internal data, excluding China and Japan (where Yahoo!-branded sites are operated by third-party licensees).
(2)    Search metrics include data from owned and operated search, Affiliate search, display PPC (display ads sold on a price-per-click basis), and content match (contextually relevant links to
       advertisers’ Websites, generally sold on a price-per-click basis).
(3)    “Paid clicks” are clicks by end users on sponsored listings on Yahoo! Properties and Affiliate sites that are sold on a price-per-click basis.
(4)    PPC is calculated as gross search revenue (before TAC), inclusive of the Microsoft RPS guarantee, divided by the number of Paid Clicks.
(5)    Display metrics include data for graphical units on core Yahoo! Properties (including mobile) sold by Yahoo! and partners such as the Newspaper Consortium. Limited to data from the U.S., U.K.,
       Italy, France, Germany, Spain, and the Asia Pacific region (excluding Australia and New Zealand, where Yahoo!-branded sites are operated by a joint venture).
(6)    Ads Sold consists of non-PPC ads displayed on Yahoo! Properties in the countries identified in footnote (5) for paying advertisers.
(7)    Price-Per-Ad is calculated as display revenue from the countries identified in footnote (5) divided by the number of Ads Sold.
                                                                                                                       7
Revenue ex-TAC Trends
                                                 Revenue ex-TAC



                                                                                       $1,221
                                               $1,169


                    $1,064   $1,076   $1,072                $1,077   $1,081   $1,089
    $ in millions




                    Q1'11    Q2'11    Q3'11    Q4'11        Q1'12    Q2'12    Q3'12    Q4'12

GAAP
Revenue :           $1,214   $1,229   $1,217   $1,324       $1,221   $1,218   $1,202   $1,346




                                                        8
     Revenue ex-TAC by Geography & Source
$ in millions                Geography                       Source


                              APAC
                              $217                   Other
                                                     $273
                      EMEA                                            Display
                       $97                                             $520
  Q4’12 = $1,221                     Americas
                                      $908

                                                      Search
                                                       $427




                             APAC                      Other
                             $219                      $248
    Q4’11 = $1,169
                     EMEA
                     $110            Americas                         Display
                                      $840                             $546
                                                    Search
                                                     $376




                                                9
Revenue ex-TAC by Source

$ in millions                                  Q1’11               Q2’11              Q3’11              Q4’11              Q1’12              Q2’12               Q3’12              Q4’12


Display revenue ex-TAC                          $471               $467                $449               $546               $454               $473                $452              $520
YOY Growth                                     10% (1)               5%                 0%                (4%)               (4%)                 1%                 0%               (5%)


Search revenue ex-TAC                           $357               $371                $374               $376               $384               $385                $414              $427
YOY Growth                                   (19%) (2)           (15%) (2)          (13%) (2)           (3%) (2)               8%                 4%                11%                14%


Other revenue ex-TAC                            $237               $239                $248               $248               $240               $222                $223              $273
YOY Growth                                     (10%)                (3%)                0%                (1%)                 1%                (7%)              (10%)               10%


Total revenue ex-TAC                           $1,064             $1,076             $1,072             $1,169              $1,077             $1,081             $1,089              $1,221
YOY Growth                                   (6%) (1)(2)          (5%) (2)           (5%) (2)           (3%) (2)               1%                 0%                 2%                4%

(1)   YOY Growth in Display revenue ex-TAC and Total revenue ex-TAC were negatively impacted by a one-time benefit in Q1’10 from transitioning some large customers from cash-basis
      accounting to accrual accounting.
(2)   YOY Growth in Search revenue ex-TAC and Total revenue ex-TAC were negatively impacted by headwinds in Q4’11 of $6M and $18M, in Q3’11 of $37M and $58M, in Q2’11 of $37M
      and $61M, and in Q1’11 of $36M and $63M, respectively.




                                                                                               10
Geographic Segment Data

$ in millions                                                                                         Q4’11                                   Q4’12                                   YOY

Americas
      Revenue ex-TAC                                                                                     $840                                  $908                                    8%
      Direct costs(1)                                                                                  (187)                                   (183)                                  (2%)
      Contribution                                                                                       $653                                  $725                                   11%
      Americas contribution margin(2)                                                                    78%                                    80%                                 200bps
EMEA
      Revenue ex-TAC                                                                                     $110                                   $97                                  (12%)
      Direct costs(1)                                                                                    (42)                                   (41)                                  (1%)
      Contribution                                                                                       $68                                    $55                                  (19%)
      EMEA contribution margin(2)                                                                        62%                                    57%                               (500bps)
Asia Pacific
      Revenue ex-TAC                                                                                     $219                                  $217                                   (1%)
      Direct costs(1)                                                                                    (55)                                   (60)                                   8%
      Contribution                                                                                       $164                                  $156                                   (5%)
      Asia Pacific contribution margin(2)                                                                75%                                    72%                               (300bps)
(1)    Direct costs for each segment include cost of revenue (excluding TAC) and other operating expenses that are directly attributable to the segment. Beginning in 2012, marketing and
       customer advocacy costs are managed locally and included as direct costs for each segment. Prior period amounts have been revised to conform to the current presentation.
(2)    Contribution margin is calculated as Contribution divided by Revenue ex-TAC for each segment.



                                                                                                    11
Total Operating Expenses less TAC
                                                        Depreciation, Amortization, and Stock-based compensation



                                                                                                                                    $1,026 (1)                                    $1,031 (3)
                                                                                          $926                  $908                                         $937 (2)
                                             $885                   $894
                      $875
 $ in millions




                     Q1'11                  Q2'11                 Q3'11                  Q4'11                 Q1'12                  Q2'12                 Q3'12                  Q4'12


 (1)             Total Operating expenses less TAC in Q2’12 was negatively impacted by a total of $136 million of restructuring charges and deal-related expenses.
 (2)             Total Operating expenses less TAC in Q3’12 was negatively impacted by a total of $25 million of restructuring charges.
 (3)             Total Operating expenses less TAC in Q4’12 was negatively impacted by $99 million of costs related to the Korea business (including restructuring charges of $83 million related
                 to the closure of the Korea business) partially offset by $7 million in net reversals of prior restructuring charges.




                                                                                                         12
Non-GAAP Total Operating Expenses
                                 Depreciation, Amortization, and Stock-based compensation


                                                                                            $938
                                      $897       $910        $902                $912
                         $885                                         $890
                 $864
 $ in millions




                 Q1'11   Q2'11       Q3'11      Q4'11        Q1'12   Q2'12      Q3'12       Q4'12




                                                        13
Adjusted EBITDA


                                                                              $509
                                          $469

                         $412                                        $408
                 $396                                        $398
                                 $378                 $384
 $ in millions




                 Q1'11   Q2'11   Q3'11   Q4'11    Q1'12      Q2'12   Q3'12   Q4'12




                                                 14
GAAP Operating Income


                                                                                          $242



                         $190                 $191
                                                                                                                                                                                  $190(3)
                                                                    $177
                                                                                                                  $169
   $ in millions




                                                                                                                                                            $152(2)




                                                                                                                                       $55(1)




                       Q1'11                 Q2'11                 Q3'11                 Q4'11                 Q1'12                 Q2'12                 Q3'12                  Q4'12
Op. margin
ex-TAC :   18%                                18%                    17%                   21%                    16%                   5%                    14%                   16%

   (1)             Operating income in Q2’12 was negatively impacted by a total of $136 million of restructuring charges and deal-related expenses. Please see slide 24.
   (2)             Operating income in Q3’12 was negatively impacted by a total of $25 million of restructuring charges. Please see slide 24.
   (3)             Operating income in Q4’12 was negatively impacted by a total of $99 million of costs related to the Korea business (including restructuring charges of $83 million related to the
                   closure of the Korea business), partially offset by $7 million in net reversals of prior restructuring charges. Please see slide 24.



                                                                                                             15
       Non-GAAP Operating Income

                                                                                      $283

                                                  $259




                          $200
                                  $191                                $190
                                          $175                 $175           $177
          $ in millions




                          Q1'11   Q2'11   Q3'11   Q4'11    Q1'12      Q2'12   Q3'12   Q4'12
Non-GAAP Operating
Margin Ex-TAC:     19%            18%     16%     22%           16%     18%    16%    23%




                                                          16
Key Balance Sheet Metrics
$ in millions                                          Q1’11               Q2’11              Q3’11              Q4’11              Q1’12              Q2’12                Q3’12     Q4’12
Assets
Cash & marketable debt
                                                       $3,528             $3,255             $2,870             $2,530              $2,652             $2,401             $9,427(1)   $6,022
securities
Accounts receivable, net                                $933               $957                $873             $1,037               $942              $1,041                $954     $1,008
Alibaba Group preference
                                                           –                   –                  –                  –                  –                   –                $803      $816
shares

Property and equipment, net                            $1,695             $1,741             $1,726             $1,731              $1,727             $1,664               $1,671    $1,686

Total assets                                          $14,928            $14,807            $14,528            $14,783             $14,963            $14,658              $20,414    $17,103
Liabilities and Equity
Current deferred revenue                                $247               $240                $206               $195               $179               $177                 $309      $297
Total current liabilities                              $1,340             $1,242             $1,202             $1,207              $1,070             $1,077               $3,506    $1,290
Total equity                                          $12,865            $12,799            $12,505            $12,581             $12,860            $12,516              $15,606    $14,606
Total liabilities and equity                          $14,928            $14,807            $14,528            $14,783             $14,963            $14,658              $20,414    $17,103

Market value of 35%
ownership in Yahoo Japan                                                                                                                                                              $6,570
(at 12/31/12) (2)

Value of approximately 24%
ownership in Alibaba based                                                                                                                                                            $8,100
on recent transaction (3)
  (1)   In Q3’12, Cash & marketable debt securities was positively impacted by Yahoo!’s receipt of proceeds from the sale of Alibaba shares.
  (2)   Pre-tax market value is based on public market share price for Yahoo Japan on December 31, 2012.
  (3)   Pre-tax value is based on $15.50 price per share at which Alibaba sold common equity to third-party purchasers in its most recent round of common equity funding (September
        2012); does not include $816 million in Alibaba Group preference shares held by Yahoo!.
                                                                                                17
    Key Cash Flow Highlights
$ in millions                                     Q1’11                 Q2’11                 Q3’11                 Q4’11                 Q1’12                Q2’12                 Q3’12      Q4’12


Tax payment on sale of
                                                       -                    -                     -                     -                     -                     -                    -     ($2,266)
Alibaba shares



Share repurchases                                  $137                  $472                  $593                  $416                  $71                  $456                  $190     ($1,451)


Net cash provided by (used
in) operating activities, as                       $206                  $331                  $356                  $431                 $297                  $275                $496(1)    $366(2)
adjusted


Acquisition of property and
                                                   $168                  $172                  $124                  $130                 $110                  $106                  $140      $150
equipment, net


Free cash flow, as
                                                    $56                   $96                  $247                  $327                 $196                   $93                  $920      $221
adjusted(3)




    (1)   Including a payment of $550 million from Alibaba in satisfaction of certain future royalty payments under the existing technology and intellectual property license agreement with
          Alibaba, GAAP Net cash provided by operating activities for Q3’12 was $1,046 million.
    (2)   Including a cash tax payment of $2.3 billion related to the sale of Alibaba shares, GAAP Net cash provided by (used in) operating activities for Q4’12 was ($1,900) million.
    (3)   See slide 27 for the reconciliation of Free cash flow and adjustments.



                                                                                                        18
Business Outlook

                                                                                                         Q1’13                               2013
                                      $ in millions
                                                                                                Current Outlook                    Current Outlook


                                      Revenue ex-TAC                                             $1,070 - $1,100                    $4,500 - $4,600


                                      Adjusted EBITDA                                                  $340 - $360                  $1,600 - $1,700


                                      GAAP Income from operations                                      $155 - $175                     $810 - $850




Note: The above business outlook is based on information and expectations as of January 28, 2013. Yahoo! does not intend, and undertakes no duty, to update this business outlook to
reflect subsequent events or circumstances; however, Yahoo! may update this business outlook or any portion thereof at any time at its discretion.




                                                                                                  19
Appendix
Table 1 – Revenue ex-TAC Calculation by Segment
Reconciliations of GAAP Revenue to Revenue ex-TAC
                                            Quarterly Data                                     Yearly Data
$ in millions    Q1’11    Q2’11    Q3’11    Q4’11        Q1’12    Q2’12    Q3’12    Q4’12    2011     2012
Americas
 GAAP Revenue    $819     $808     $791     $885         $836     $822     $844     $960     $3,303   $3,462
 TAC              (38)     (39)     (37)     (45)         (43)     (46)     (41)     (52)    (160)    (183)
Revenue ex-TAC   $781     $769     $754     $840         $793     $776     $802     $908     $3,143   $3,279
EMEA
 GAAP Revenue    $154     $163     $148     $164         $134     $128      $96     $114     $629     $472
 TAC              (58)     (58)     (52)     (55)         (46)     (34)     (17)     (17)    (222)    (114)
Revenue ex-TAC    $97     $105      $96     $110          $88      $94      $79      $97     $407     $358
Asia Pacific
 GAAP Revenue    $241     $258     $277     $275         $251     $268     $262     $272     $1,052   $1,053
 TAC              (54)     (56)     (55)     (56)         (55)     (57)     (54)     (56)    (221)    (222)
Revenue ex-TAC   $187     $203     $222     $219         $196     $211     $207     $217     $830     $831
Worldwide
 GAAP Revenue    $1,214   $1,229   $1,217   $1,324       $1,221   $1,218   $1,202   $1,346   $4,984   $4,987
 TAC             (150)    (153)    (145)    (155)        (144)    (137)    (113)    (125)    (603)    (519)
Revenue ex-TAC   $1,064   $1,076   $1,072   $1,169       $1,077   $1,081   $1,089   $1,221   $4,381   $4,468


                                                    21
Table 2 – Revenue Details
Reconciliations of GAAP Revenue to Revenue ex-TAC by Source

$ in millions           Q1’11    Q2’11    Q3’11    Q4’11    Q1’12    Q2’12    Q3’12    Q4’12    2012
Display

 GAAP Display revenue   $523     $524     $502     $612     $511     $535     $506     $591     $2,143
 YOY Growth              6%       2%      (2%)     (4%)     (2%)      2%       1%      (3%)     (1%)
 Display TAC             (52)     (57)     (53)     (66)     (57)     (62)     (54)     (70)    (244)
Display revenue ex-     $471     $467     $449     $546     $454     $473     $452     $520     $1,899
TAC

Search

 GAAP Search revenue    $455     $467     $467     $465     $470     $461     $473     $482     $1,886
 YOY Growth             (46%)    (45%)    (44%)    (27%)     3%      (1%)      1%       4%       2%
 Search TAC              (98)     (96)     (92)     (89)     (87)     (75)     (58)     (55)    (275)
Search revenue ex-TAC   $357     $371     $374     $376     $384     $385     $414     $427     $1,611

Other

 GAAP Other revenue     $237     $239     $248     $248     $240     $222     $223     $273     $958
 YOY Growth             (11%)    (3%)      0%      (1%)      1%      (7%)     (10%)     10%     (1%)
 Other TAC               (0)      (0)      (0)      (0)      (0)      (0)      (0)      (0)      (0)
Other revenue ex-TAC    $237     $239     $248     $248     $240     $222     $223     $273     $958

Total

 GAAP Revenue           $1,214   $1,229   $1,217   $1,324   $1,221   $1,218   $1,202   $1,346   $4,987
 YOY Growth             (24%)    (23%)    (24%)    (13%)     1%      (1%)     (1%)      2%       0%
 TAC                    (150)    (153)    (145)    (155)    (144)    (137)    (113)    (125)    (519)
Revenue ex-TAC          $1,064   $1,076   $1,072   $1,169   $1,077   $1,081   $1,089   $1,221   $4,468



                                                    22
Table 3 – Revenue and Direct Costs by Segment

$ in millions                                                                                                                Q4’11                                            Q4’12
Revenue by segment:
       Americas                                                                                                               $885                                             $960
       EMEA                                                                                                                    164                                              114
       Asia Pacific                                                                                                            275                                              272
Total revenue                                                                                                                1,324                                            1,346
TAC                                                                                                                           (155)                                           (125)
      Total revenue ex-TAC                                                                                                  $1,169                                           $1,221
Direct costs by segment:
       Americas                                                                                                               $187                                            $183
       EMEA                                                                                                                     42                                               41
       Asia Pacific                                                                                                             55                                               60
Global operating costs(1)                                                                                                      411                                              443
Restructuring charges, net                                                                                                      16                                               76
Depreciation and amortization                                                                                                  152                                              169
Stock-based compensation expense                                                                                                59                                               58
      Income from operations                                                                                                  $242                                             $190
(1)    Global operating costs include product development, service engineering and operations, general and administrative, and other corporate expenses that are managed on a global
       basis and that are not directly attributable to any particular segment. Prior to 2012, marketing and customer advocacy costs were managed on a global basis and included as
       global operating costs. Prior period amounts have been revised to conform to the current presentation.


                                                                                                   23
      Table 4 – Total Operating Expenses
      Reconciliations of GAAP Total Operating Expenses to Total Operating
      Expenses less TAC and to Non-GAAP Total Operating Expenses
      $ in millions                               Q1’11               Q2’11              Q3’11                Q4’11            Q1’12               Q2’12              Q3’12              Q4’12

      Total operating expenses
      less TAC and Non-GAAP
      total operating
      expenses:

      GAAP Total operating
                                                  $1,025             $1,038             $1,039                $1,082           $1,052             $1,163             $1,050              $1,156
      expenses

      Less: Traffic acquisition
                                                   (150)              (153)               (145)               (155)             (144)              (137)               (113)              (125)
      costs

      Total operating expenses
                                                   $875               $885                $894                $926              $908              $1,026               $937              $1,031
      less TAC

      Less: Restructuring
                                                     11                  -                 (3)                 16                  6                129                  25                 (7)
      Charges(1)

      Less: Deal-related
                                                      –                  –                  –                   –                  –                  7                  –                   –
      expenses(2)

      Less: Costs associated
      with the Korea business                         –                  –                  –                   –                  –                  –                  –                  99
      and its closure

      Non-GAAP Total
                                                   $864               $885                $897                $910              $902               $890                $912               $938
      operating expenses

(1)    For Q4’12012, this amount excludes the restructuring charges related to the closure of the Korea business of $83 million, which are included in the line “Costs associated with the Korea
       business and its closure.”
(2)    Deal-related expenses relate to, among other matters, the agreement Yahoo! entered into with Alibaba regarding Yahoo!’s stake in Alibaba.

                                                                                                         24
         Table 5 – Adjusted EBITDA Calculation
         Reconciliation of GAAP Net Income Attributable to Yahoo! Inc. to
         Adjusted EBITDA
                                                                                                               Quarterly Data                                                                    Yearly Data

  $ in thousands                                           Q1’11           Q2’11           Q3’11           Q4’11            Q1’12           Q2’12            Q3’12            Q4’12        2011           2012

  GAAP Net income attributable to Yahoo!
                                                         $222,992        $236,972        $293,291         $295,572        $286,343        $226,631        $3,160,238        $272,267     $1,048,827    $3,945,479
  Inc.


  (a) Depreciation and amortization                       160,438         161,373         152,223         151,830         153,248         157,739           169,511          168,769      625,864        649,267


  (b) Stock based compensation expense                     35,116          59,048          50,947          58,847          55,966          49,571           61,366            57,574      203,958        224,477


  (c) Restructuring charges, net                           10,575            237           (2,721)         16,329           5,717         129,092           24,727          (6,794)(1)    24,420        152,742(1)


  (d) Other income, net(2)                                 (5,027)          5,666         (18,046)         (9,768)         (2,278)        (20,175)        (4,607,656)        (17,730)     (27,175)     (4,647,839)


  (e) Provision for income taxes                           52,120          55,629          55,731          78,287          56,419          26,523          1,774,094          83,007      241,767       1,940,043


  (f) Earnings in equity interest                         (82,180)       (108,902)       (158,775)       (127,063)       (172,243)        (179,991)        (175,265)        (148,939)    (476,920)      (676,438)


  (g) Net income attributable to
                                                           1,840            1,530           5,053           5,419           1,135           1,825             778             1,385       13,842          5,123
  noncontrolling interests


  (h) Deal-related expenses(3)                                -               -                -               -               -            6,500               -                 -          -            6,500


  (i) Costs associated with the Korea
                                                              -               -                -               -               -               -                -             99,485         -           99,485
  business and its closure


  Adjusted EBITDA                                        $395,874        $411,553        $377,703         $469,453        $384,307        $398,715         $407,793         $509,024     $1,654,583    $1,698,839


(1)   For Q4’12 and Full Year 2012, this amount excludes the restructuring charges related to the closure of the Korea business of $83 million, which are included in item (i).
(2)   Q3’12 and Full Year 2012 include a $4.6 billion gain on the sale of Alibaba shares.
(3)   Deal-related expenses relate to, among other matters, the agreement Yahoo! entered into with Alibaba regarding Yahoo!’s stake in Alibaba.

                                                                                                               25
 Table 6 – Non-GAAP Operating Income Calculation
 Reconciliation of GAAP Operating Income to Non-GAAP Operating
 Income
                                                                                 Quarterly Data                                                                              Yearly Data

$ in thousands                   Q1’11           Q2’11           Q3’11           Q4’11           Q1’12           Q2’12           Q3’12           Q4’12            2010            2011            2012

GAAP Operating
                               $189,745        $190,895        $177,254        $242,447        $169,376         $54,813        $152,189        $189,990        $772,524        $800,341         $566,368
income

(a) Reimbursements
from Microsoft for
                                    –               –               –               –               –               –               –               –           (43,300)            –               –
transition costs incurred
in prior periods(1)

(b) Restructuring
                                10,575            237           (2,721)         16,329           5,717          129,092         24,727         (6,794) (2)      57,957          24,420          152,742(2)
charges, net


(c) Deal-related
                                    –               –               –               –               –            6,500              –               –               –               –             6,500
expenses(3)


(d) Costs associated
with the Korea                      –               –               –               –               –               –               –                               –               –
                                                                                                                                                99,485                                           99,485
business and its
closure

Non-GAAP Operating
                               $200,320        $191,132        $174,533        $258,776        $175,093        $190,405        $176,916        $282,681        $787,181        $824,761         $825,095
income

GAAP Operating
                                  16%             16%             15%             18%             14%             5%              13%             14%             12%             16%             12%
margin

Non-GAAP Operating
                                  16%             16%             14%             20%             14%             16%             15%             21%             12%             17%             17%
margin(4)

Non-GAAP Operating
                                  19%             18%             16%             22%             16%             18%             16%             23%             17%             19%             18%
margin ex-TAC

    (1)   Non-GAAP Operating income excludes reimbursements for costs incurred in prior periods. The net reimbursement adjustment of $43 million in Q1'10 is equal to the transition costs of
          $11 million and $32 million incurred in Q3’09 and Q4’09, respectively, in connection with the Search Agreement.
    (2)   For Q4’12 and Full Year 2012, this amount excludes the restructuring charges related to the closure of the Korea business of $83 million, which are included in item (d).
    (3)   Deal-related expenses relate to, among other matters, the agreement Yahoo! entered into with Alibaba regarding Yahoo!’s stake in Alibaba.
    (4)   Non-GAAP Operating margin is calculated as Non-GAAP Operating income divided by GAAP Revenue.
                                                                                                       26
      Table 7 – Free Cash Flow Calculation
      Reconciliation of GAAP Cash Flow from Operating Activities to
      Free Cash Flow and to Free Cash Flow, as adjusted
                                                                                                Quarterly Data                                                                              Yearly Data

$ in millions                         Q1’11            Q2’11            Q3’11            Q4’11            Q1’12            Q2’12             Q3’12               Q4’12                2011           2012

Free cash flow:

Net cash provided by
(used in) operating                   $206             $331             $356             $431             $297              $275            $1,046              ($1,900)            $1,324          ($282)
activities

Excess tax benefits from
                                        18               12               14               26                 8               9                14                    5                 71             36
stock-based awards


Acquisition of property &
                                      (168)            (172)            (124)            (130)            (110)            (106)              (140)               (150)              (593)           (506)
equipment, net

Dividends received from
                                         –              (75)               –                –                 –             (84)                –                    –                (75)           (84)
equity investees

Free cash flow(1)                      $56              $96             $247             $327             $196              $93              $920(1)            ($2,045)              $726          ($835)

Tax payment on sale of
                                         –                –                –                –                 –               –                 –                 2,266                 –            2,266
Alibaba shares(2)

Free cash flow, as
                                       $56              $96             $247             $327             $196              $93               $920                $221                $726          $1,431
adjusted




      (1)   Free cash flow was positively impacted in Q3'12 by a cash payment of $550 million from Alibaba in satisfaction of certain future royalty payments under the existing technology
            and intellectual property license agreement with Alibaba.
      (2)   Cash tax payment of $2.3 billion related to the sale of Alibaba shares.
                                                                                                         27
   Table 8 – Non-GAAP Net Earnings Per Share Calculation
   Reconciliation of GAAP Net Earnings Attributable to Yahoo! Inc. and GAAP Net
   Income Attributable to Yahoo! Inc. Common Stockholders Per Share – Diluted
   to Non-GAAP Net Earnings and Non-GAAP Net Earnings Per Share – Diluted

                                                                                                         Quarterly Data                                              Yearly Data

$ in millions, except per share
                                                        Q1’11           Q2’11           Q3’11           Q4’11           Q1’12          Q2’12    Q3’12     Q4’12    2011      2012
amounts
GAAP Net income attributable to                          $223            $237            $293            $296            $286          $227     $3,160    $272     $1,049   $3,945
Yahoo! Inc.
Adjustments                                                 7               0             (27)              11              4           100     (2,740)    97       (8)     (2,539)

Non-GAAP Net earnings                                    $230            $237            $266            $307            $290          $327      $421     $370     $1,040   $1,407

GAAP Revenue                                           $1,214          $1,229          $1,217           $1,324          $1,221         $1,218   $1,202    $1,346   $4,984   $4,987

GAAP Net margin                                          18%             19%             24%             22%              23%           19%      NM        20%      21%      NM

Non-GAAP Net margin(1)                                   19%             19%             22%             23%              24%           27%      35%       27%      21%      28%

GAAP Net income attributable to
Yahoo! Inc. common Stockholders                         $0.17           $0.18           $0.23            $0.24           $0.23         $0.18    $2.64     $0.23    $0.82    $3.28
per share – diluted

Non-GAAP Net earnings per
                                                        $0.17           $0.18           $0.21            $0.25           $0.24         $0.27    $0.35     $0.32    $0.81    $1.17
share – diluted

Diluted shares outstanding                              1,320           1,308           1,260            1,241           1,226         1,222    1,195     1,168    1,282    1,203


   (1)   Non-GAAP Net margin is calculated as Non-GAAP Net income divided by GAAP Revenue.

   Note: All per share amounts are based on fully diluted share counts. Please refer to Appendix Table 9 for details on Adjustments.
                                                                                                       28
       Table 9 - Non-GAAP Net Earnings Calculation
       Reconciliation of GAAP Net Income Attributable to Yahoo! Inc. to
       Non-GAAP Net Earnings, with Details on Adjustments

                                                                                                              Quarterly Data                                                                      Yearly Data

$ in thousands                                           Q1’11            Q2’11           Q3’11           Q4’11           Q1’12            Q2’12            Q3’12             Q4’12         2011            2012

GAAP Net income attributable to Yahoo!
                                                        $222,992        $236,972        $293,291        $295,572         $286,343        $226,631        $3,160,238         $272,267      $1,408,827     $3,945,479
Inc.

(a) Restructuring charges, net                           10,575            237           (2,721)          16,329           5,717          129,092           24,727          (6,794) (2)    24,420         152,742(2)


(b) Non-cash gain related to the dilution of
the Company's ownership interest in Alibaba
                                                            –                –           (25,083)            –               –                –                –                   –       (25,083)             –
Group, which is included in earnings in
equity interests



(c) Deal-related expenses(1)                                –                –               –               –               –             6,500               –                   –          –             6,500



(d) Gain related to sale of Alibaba shares                  –                –               –               –               –                –          (4,603,322)               –          –          (4,603,322)



(e) Costs associated with the Korea
                                                            –                –               –               –               –                –                –             99,485           –            99,485
business and its closure



(f) To adjust the provision for income taxes
to exclude the tax impact of items (a), (c),             (3,362)           (75)            865            (5,192)         (2,047)        (35,674)         1,839,035           4,626        (7,764)        1,805,940
(d) and (e)


Non-GAAP Net earnings                                   $230,205        $237,134        $266,352        $306,709         $290,013        $326,549         $420,678          $369,584      $1,040,400     $1,406,824




 (1)   Deal-related expenses relate to, among other matters, the agreement Yahoo! entered into with Alibaba regarding Yahoo!’s stake in Alibaba.
 (2)   For Q4’12 and Full Year 2012, this amount excludes the restructuring charges related to the closure of the Korea business of $83 million, which are included in item (e).
                                                                                                             29
Table 10 – Business Outlook Reconciliations


                                                                                                                          Q1’13
$ in millions                                                                                                                                                     FY 2013 Current Outlook
                                                                                                                     Current Outlook

Revenue ex-TAC:

   GAAP Revenue                                                                                                        $1,130 - $1,180                                     $4,750 - $4,880

   Less: TAC                                                                                                                $60 - $80                                          $250 - $280

   Revenue ex-TAC                                                                                                      $1,070 - $1,100                                     $4,500 - $4,600

Adjusted EBITDA(1)

   Depreciation & Amortization                                                                                            $140 - $160                                          $600 - $630

   Stock-Based Compensation                                                                                                 $30 - $50                                          $240 - $270




(1) Yahoo! has not reconciled its Adjusted EBITDA outlook to the comparable forward-looking GAAP financial measure, Net income attributable to Yahoo! Inc., because it is unable to
provide a forward-looking estimate of certain reconciling items between Net income attributable to Yahoo! Inc. and Adjusted EBITDA, including: other income, net; provision for income
taxes; and earnings in equity interests. Certain factors that are materially significant to Yahoo!’s ability to estimate these items are out of the Company’s control and/or cannot be reasonably
predicted. Accordingly, a reconciliation to Net income attributable to Yahoo! Inc. is not available without unreasonable effort.

Note: The above business outlook is based on information and expectations as of January 28, 2013. Yahoo! does not intend, and undertakes no duty, to update the business outlook to
reflect subsequent events or circumstances; however, Yahoo! may update the business outlook or any portion thereof at any time at its discretion.

                                                                                                      30

				
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