8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

January 29, 2008
Date of Report: (Date of earliest event reported)

Yahoo! Inc.
(Exact name of registrant as specified in its charter)

Delaware	0-28018	77-0398689
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No)

701 First Ave.
Sunnyvale, California 94089
(Address of principal executive offices, including zip code)

(408) 349-3300
(Registrant's telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On January 29, 2008, Yahoo! Inc., a Delaware corporation ("Yahoo!") announced its financial results for the fourth quarter and year ended December 31, 2007 and certain other information. A copy of Yahoo!'s press release announcing these financial results and certain other information is attached hereto as Exhibit 99.1.

The information in this report, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Yahoo! under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits.
	The following exhibit is furnished with this report on Form 8-K:
	99.1	Yahoo! Inc. Press Release dated January 29, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	YAHOO! INC.
	By:	/s/ Blake Jorgensen
			Blake Jorgensen
			Chief Financial Officer (Principal Financial Officer)
Date: January 29, 2008

YAHOO! INC.

INDEX TO EXHIBITS

Exhibit Number	Description
99.1	Yahoo! Inc. Press Release dated January 29, 2008

EX-99.1

Exhibit 99.1

Yahoo! Reports Fourth Quarter and Full Year 2007 Financial Results

Full Year Revenues - $6,969 Million

Full Year Operating Income - $695 Million

Full Year Operating Income Before Depreciation, Amortization, and Stock-Based Compensation Expense - $1,927 Million

SUNNYVALE, Calif.--(BUSINESS WIRE)--Yahoo! Inc. (Nasdaq:YHOO) today reported results for the fourth quarter and full year ended December 31, 2007.

“We are executing aggressively against Yahoo!'s three big strategic priorities and that hard work is starting to bear fruit, as evidenced by the 20% year-over-year growth in O&O marketing services we achieved in the fourth quarter. This is a pivotal time for Yahoo!’s business and we have a unique window of opportunity right now to make the necessary, game-changing investments that will help us capture a significant piece of the growing ad market and create substantial long-term value for our shareholders,” said Jerry Yang, co-founder and chief executive officer, Yahoo! Inc. “While we will continue to face headwinds this year, we believe that the moves we are making will help us exit 2008 stronger and more competitive and return to higher levels of operating cash flow growth in 2009.”

Fourth Quarter 2007 Financial Results

• Revenues were $1,832 million for the fourth quarter of 2007, an 8 percent increase compared to $1,702 million for the same period of 2006.
• Marketing services revenues were $1,590 million for the fourth quarter of 2007, a 7 percent increase compared to $1,490 million for the same period of 2006.
• Marketing services revenues from Owned and Operated sites were $1,035 million for the fourth quarter of 2007, a 21 percent increase compared to $853 million for the same period of 2006.
• Marketing services revenues from Affiliate sites were $555 million for the fourth quarter of 2007, a 13 percent decrease compared to $637 million for the same period of 2006.
• Fees revenues were $242 million for the fourth quarter of 2007, a 14 percent increase compared to $213 million for the same period of 2006.
• Revenues excluding traffic acquisition costs (“TAC”) were $1,403 million for the fourth quarter of 2007, a 14 percent increase compared to $1,228 million for the same period of 2006.
• Gross profit for the fourth quarter of 2007 was $1,130 million, a 12 percent increase compared to $1,012 million for the same period of 2006.
• Operating income for the fourth quarter of 2007 was $191 million, a 38 percent decrease compared to $308 million for the same period of 2006.
• Operating income before depreciation, amortization, and stock-based compensation expense for the fourth quarter of 2007 was $527 million, a 2 percent decrease compared to $540 million for the same period of 2006.
• Cash flow from operating activities for the fourth quarter of 2007 was $657 million, a 293 percent increase compared to $167 million for the same period of 2006.
• Free cash flow for the fourth quarter of 2007 was $330 million, a 19 percent increase compared to $278 million for the same period of 2006.
• Net income for the fourth quarter of 2007 was $206 million or $0.15 per diluted share compared to $269 million or $0.19 per diluted share for the same period of 2006.
• Non-GAAP net income for the fourth quarter of 2007 was $280 million or $0.20 per diluted share compared to non-GAAP net income of $297 million or $0.21 per diluted share for the same period of 2006.

Fourth Quarter 2007 Segment Financial Results

• United States segment revenues for the fourth quarter of 2007 were $1,313 million, a 15 percent increase compared to $1,145 million for the same period of 2006.
• International segment revenues for the fourth quarter of 2007 were $519 million, a 7 percent decrease compared to $558 million for the same period of 2006.
• United States segment operating income before depreciation, amortization, and stock-based compensation expense for the fourth quarter of 2007 was $391 million, a 5 percent decrease compared to $410 million for the same period of 2006.
• International segment operating income before depreciation, amortization, and stock-based compensation expense for the fourth quarter of 2007 was $136 million, a 5 percent increase compared to $130 million for the same period of 2006.

“The steps we’ve been taking over the course of the past year represent profound, fundamental changes to virtually every aspect of Yahoo!’s business, and we're confident they will help us drive our next leg of growth and gain future ad market share. Even as we increase investment in key areas of our business, we’re making tough but necessary decisions to streamline our organization and redeploy assets to our most promising technology and marketing initiatives,” said Sue Decker, president, Yahoo! Inc. “We still have a tremendous amount of work to do, but we’re confident we can substantially improve our users' experiences and achieve meaningful incremental monetization opportunities for Yahoo!’s own ad inventory and that of our partners.”

Full Year 2007 Financial Results

• Revenues were $6,969 million for 2007, an 8 percent increase compared to $6,426 million for 2006.
• Marketing services revenues were $6,088 million for 2007, an 8 percent increase compared to $5,627 million for 2006.
• Marketing services revenues from Owned and Operated sites were $3,671 million for 2007, a 20 percent increase compared to $3,071 million for 2006.
• Marketing services revenues from Affiliate sites were $2,417 million for 2007, a 5 percent decrease compared to $2,556 million for 2006.
• Fees revenues were $881 million for 2007, a 10 percent increase compared to $798 million for 2006.
• Revenues excluding TAC were $5,113 million for 2007, a 12 percent increase compared to $4,560 million for 2006.
• Gross profit for 2007 was $4,131 million, a 10 percent increase compared to $3,750 million for 2006.
• Operating income for 2007 was $695 million, a 26 percent decrease compared to $941 million for 2006.
• Operating income before depreciation, amortization, and stock-based compensation expense for 2007 was $1,927 million, a 1 percent increase compared to $1,906 million for 2006.
• Cash flow from operating activities for 2007 was $1,954 million, a 42 percent increase compared to $1,372 million for 2006.
• Free cash flow for 2007 was $1,337 million, a 6 percent increase compared to $1,267 million for 2006.
• Net income for 2007 was $660 million or $0.47 per diluted share compared to $751 million or $0.52 per diluted share for 2006.
• Non-GAAP net income for 2007 was $995 million or $0.71 per diluted share compared to non-GAAP net income of $1,011 million or $0.69 per diluted share for 2006.

Full Year 2007 Segment Financial Results

• United States segment revenues for 2007 were $4,727 million, an 8 percent increase compared to $4,366 million for 2006.
• International segment revenues for 2007 were $2,242 million, a 9 percent increase compared to $2,060 million for 2006.
• United States segment operating income before depreciation, amortization, and stock-based compensation expense for 2007 was $1,434 million, a 1 percent decrease compared to $1,452 million for 2006.
• International segment operating income before depreciation, amortization, and stock-based compensation expense for 2007 was $493 million, a 9 percent increase compared to $454 million for 2006.

Non-GAAP Financial Measures

Explanations of the Company’s non-GAAP financial measures and the related reconciliations to the GAAP financial measures the Company considers most comparable are included in the accompanying “Note to Unaudited Condensed Consolidated Statements of Income,” “Reconciliations to Unaudited Condensed Consolidated Statements of Income,” and “Reconciliation of GAAP Net Income and GAAP Net Income Per Share to Non-GAAP Net Income and Non-GAAP Net Income Per Share.”

Cash Flow Information

In addition to free cash flow of $330 million for the fourth quarter of 2007, Yahoo! generated $131 million from the issuance of common stock as a result of the exercise of employee stock options. This was offset by $221 million used for direct stock repurchases and $618 million used for acquisitions. Cash, cash equivalents, and investments in marketable debt securities were $2,363 million at December 31, 2007 as compared to $2,763 million at September 30, 2007, a decrease of $400 million.

In addition to free cash flow of $1,337 million for the year ended December 31, 2007, Yahoo! generated $375 million from the issuance of common stock as a result of the exercise of employee stock options. This was offset by $1,586 million used for direct stock repurchases, a net $250 million used in structured stock repurchase transactions, and $974 million used for acquisitions. Cash, cash equivalents and investments in marketable debt securities were $2,363 million at December 31, 2007 as compared to $3,537 million at December 31, 2006, a decrease of $1,174 million.

“We are pleased with our results this quarter and believe we are prioritizing and investing appropriately to achieve our strategic objectives,” said Blake Jorgensen, chief financial officer, Yahoo! Inc. “As we operationalize our strategy in 2008, we will remain focused on generating long-term shareholder value.”

Quarterly Conference Call

Yahoo! will host a conference call to discuss fourth quarter results at 5:00 p.m. Eastern Time today. A live webcast of the conference call, together with supplemental financial information, can be accessed through the Company's Investor Relations website at http://yhoo.client.shareholder.com/results.cfm. In addition, an archive of the webcast can be accessed through the same link. An audio replay of the call will be available following the conference call by calling 888-286-8010 or 617-801-6888, reservation number: 53769531.

About Yahoo!

Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo! is focused on powering its communities of users, advertisers, publishers, and developers by creating indispensable experiences built on trust. Yahoo! is headquartered in Sunnyvale, California. For more information, visit pressroom.yahoo.com or the Company’s blog, Yodel Anecdotal.

Owned and Operated sites refer to Yahoo!’s owned and operated online properties and services.

Affiliate sites refer to Yahoo!'s distribution network of third-party entities who have integrated Yahoo!'s advertising offerings into their websites or their other offerings.

This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission (“SEC”): revenues excluding traffic acquisition costs or TAC, operating income before depreciation, amortization, and stock-based compensation expense, free cash flow, and non-GAAP net income and non-GAAP net income per share. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles (“GAAP”). See “Note to Unaudited Condensed Consolidated Statements of Income,” “Reconciliations to Unaudited Condensed Consolidated Statements of Income,” and “Reconciliation of GAAP Net Income and GAAP Net Income Per Share to Non-GAAP Net Income and Non-GAAP Net Income Per Share” included in this press release for further information regarding these non-GAAP financial measures.

This press release and its attachments contain forward-looking statements that involve risks and uncertainties concerning Yahoo!'s expected financial performance (including without limitation the statements and information in the Business Outlook section and the quotations from management in this press release), as well as Yahoo!'s strategic and operational plans. Actual results may 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 implementation and results of the Company's ongoing strategic initiatives; the Company’s ability to compete with new or existing competitors; reduction in spending by, or loss of, marketing services customers; the demand by customers for Yahoo!'s premium services; acceptance by users of new products and services; risks related to joint ventures and the integration of acquisitions; risks related to the Company’s international operations; failure to manage growth and diversification; adverse results in litigation, including intellectual property infringement claims; the Company’s ability to protect its intellectual property and the value of its brands; dependence on key personnel; dependence on third parties for technology, services, content and distribution; and general economic conditions. All information set forth in this press release and its attachments is as of January 29, 2008. Yahoo! does not intend, and undertakes no duty, to update this information to reflect future events or circumstances. More information about potential factors that could affect the Company's business and financial results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2006 and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, which are on file with the SEC and available at the SEC's website at www.sec.gov. Additional information will also be set forth in those sections in Yahoo!’s Annual Report on Form 10-K for the year ended December 31, 2007, which will be filed with the SEC in the first quarter of 2008.

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.

Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
				Three Months Ended				Year Ended
				December 31,				December 31,
				2006		2007		2006		2007
	Revenues		$	1,702,448	$	1,831,998	$	6,425,679	$	6,969,274
	Cost of revenues			690,893		701,909		2,675,723		2,838,758
	Gross profit			1,011,555		1,130,089		3,749,956		4,130,516
	Operating expenses:
		Sales and marketing		334,229		441,572		1,322,259		1,610,357
		Product development		204,748		288,970		833,147		1,084,238
		General and administrative		137,600		183,497		528,798		633,431
		Amortization of intangibles		27,151		24,813		124,786		107,077
		Total operating expenses		703,728		938,852		2,808,990		3,435,103
	Income from operations			307,827		191,237		940,966		695,413
	Other income, net			35,240		44,076		157,034		154,011
	Income before income taxes, earnings in equity interests, and minority interests
				343,067		235,313		1,098,000		849,424
	Provision for income taxes			(108,009)		(78,520)		(458,011)		(337,263)
	Earnings in equity interests			33,853		52,888		112,114		150,689
	Minority interests in operations of consolidated subsidiaries			(238)		(3,958)		(712)		(2,850)
	Net income		$	268,673	$	205,723	$	751,391	$	660,000
	Net income per share - diluted		$	0.19	$	0.15	$	0.52	$	0.47
	Shares used in per share calculation - diluted			1,419,143		1,394,656		1,457,686		1,404,654
	Stock-based compensation expense was allocated as follows:
		Cost of revenues	$	1,665	$	3,709	$	6,621	$	10,628
		Sales and marketing		35,258		73,741		155,084		246,472
		Product development		32,660		53,853		144,807		218,207
		General and administrative		25,492		26,799		118,418		97,120
		Total stock-based compensation expense	$	95,075	$	158,102	$	424,930	$	572,427
	Supplemental Financial Data (See Note)
	Revenues excluding TAC		$	1,227,935	$	1,403,129	$	4,559,755	$	5,112,573
	Operating income before depreciation, amortization, and stock-based compensation expense		$	540,389	$	527,062	$	1,905,917	$	1,927,035
	Free cash flow		$	277,959	$	330,389	$	1,266,650	$	1,336,894
	Non-GAAP net income per share excluding stock-based compensation expense and other items		$	0.21	$	0.20	$	0.69	$	0.71

Yahoo! Inc.

Note to Unaudited Condensed Consolidated Statements of Income

This press release and its attachments include the non-GAAP financial measures of revenues excluding traffic acquisition costs or TAC, operating income before depreciation, amortization, and stock-based compensation expense, free cash flow, non-GAAP net income, and non-GAAP net income per share, which are reconciled to gross profit, income from operations, cash flow from operating activities, net income, and net income per share, respectively, which we believe are the most comparable GAAP measures. We use these non-GAAP financial measures for internal managerial purposes, when publicly providing our business outlook, and to facilitate period-to-period comparisons. We describe limitations specific to each non-GAAP financial measure below. Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure or measures. Further, management uses non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, gross profit, income from operations, cash flow from operating activities, net income, and net income per share calculated in accordance with GAAP.

Revenues excluding TAC is defined as gross profit plus other cost of revenues. Under GAAP, both our revenues and cost of revenues include TAC. In defining revenues excluding TAC as our non-GAAP gross profit measure, we have removed TAC from both revenues and cost of revenues. TAC consists of payments made to Affiliate sites and payments made to companies that direct consumer and business traffic to the Yahoo! website. We present revenues excluding TAC: (1) to provide a metric for our investors to analyze and value our Company and (2) to provide investors one of the primary metrics used by the Company for evaluation and decision-making purposes. We provide revenues excluding TAC because we believe it is useful to investors in valuing our Company. One of the ways investors value companies is to apply a multiple to revenues. Since a significant portion of the GAAP revenues associated with our sponsored search offerings is paid to our Affiliate sites, we believe investors find it more meaningful to apply multiples to revenues excluding TAC to assess our value as this avoids “double counting” revenues that are paid to, and being reported by, our Affiliate sites. Further, management uses revenues excluding TAC for evaluating the performance of our business, making operating decisions, budgeting purposes, and as a factor in determining management compensation. A limitation of revenues excluding TAC is that it is a measure which we have defined for internal and investor purposes that may be unique to the Company, and therefore it may not enhance the comparability of our results to other companies in our industry who have similar business arrangements but address the impact of TAC differently. Management compensates for these limitations by also relying on the comparable GAAP financial measures of revenues, cost of revenues, and gross profit, each of which includes the impact of TAC.

Operating income before depreciation, amortization, and stock-based compensation expense is defined as income from operations before depreciation, amortization of intangible assets, and stock-based compensation expense (including the compensation of Terry Semel who served as our chief executive officer through June 18, 2007 and whose compensation after June 1, 2006 consisted almost entirely of stock-based compensation). We consider this measure to be an important indicator of the operational strength of the Company. We exclude depreciation and amortization because while tangible and intangible assets support our businesses, we do not believe the related depreciation and amortization costs are directly attributable to the operating performance of our business. This measure is used by some investors when assessing the performance of our Company. In addition, because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding stock-based compensation enhances the ability of management and investors to understand the impact of stock-based compensation expense on our operating income. We do not include depreciation, amortization, and stock-based compensation expense in our internal measures or in the measures used by the Company to formulate our business outlook presented with our quarterly financial information to investors. A limitation associated with the non-GAAP measure of operating income before depreciation, amortization, and stock-based compensation expense is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our businesses. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures. A further limitation associated with this measure is that it does not include stock-based compensation expense related to the Company’s workforce. Management compensates for these limitations by also relying on the comparable GAAP financial measure of income from operations, which includes depreciation, amortization, and stock-based compensation expense.

Free Cash Flow is a non-GAAP measure defined as cash flow from operating activities (adjusted to include excess tax benefits from stock-based compensation), less net capital expenditures and dividends received. We consider free cash flow to be a liquidity measure which provides useful information to management and investors about the amount of cash generated by the business after the acquisition of property and equipment, which can then be used for strategic opportunities including, among others, investing in the Company's business, making strategic acquisitions, strengthening the balance sheet, and repurchasing stock. A limitation of free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. Management compensates for this limitation by also relying on the net change in cash and cash equivalents as presented in the Company’s unaudited condensed consolidated statements of cash flows prepared in accordance with GAAP which incorporates all cash movements during the period.

Non-GAAP net income is defined as net income excluding certain gains, losses, expenses, and their related tax effects that we do not believe are indicative of our ongoing operating results and further adjusted for stock-based compensation expense. Effective January 1, 2006, we adopted Statement of Financial Accounting Standard No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”). In our calculation of non-GAAP net income and non-GAAP net income per share, we have excluded stock-based compensation expense calculated in accordance with SFAS 123R and its related tax effects. We consider non-GAAP net income and non-GAAP net income per share to be profitability measures which facilitate the forecasting of our operating results for future periods and allow for the comparison of our results to historical periods. A limitation of non-GAAP net income and non-GAAP net income per share is that they do not include all items that impact our net income and net income per share for the period. Management compensates for this limitation by also relying on the comparable GAAP financial measures of net income and net income per share, both of which include the gains, losses, expenses and related tax effects that are excluded from non-GAAP net income and non-GAAP net income per share.

Yahoo! Inc.
Reconciliations to Unaudited Condensed Consolidated Statements of Income
(in thousands)
					Three Months Ended			Year Ended
					December 31,				December 31,
					2006		2007		2006		2007
	Revenues for groups of similar services:
		Marketing services:
			Owned and Operated sites	$	853,175	$	1,035,407	$	3,070,715	$	3,670,830
			Affiliate sites		636,559		554,580		2,556,492		2,417,409
		Marketing services			1,489,734		1,589,987		5,627,207		6,088,239
		Fees			212,714		242,011		798,472		881,035
		Total revenues		$	1,702,448	$	1,831,998	$	6,425,679	$	6,969,274
	Revenues by segment:
		United States		$	1,144,702	$	1,312,941	$	4,365,922	$	4,727,123
		International			557,746		519,057		2,059,757		2,242,151
		Total revenues		$	1,702,448	$	1,831,998	$	6,425,679	$	6,969,274
	Cost of revenues:
		Traffic acquisition costs ("TAC")		$	474,513	$	428,869	$	1,865,924	$	1,856,701
		Other cost of revenues			216,380		273,040		809,799		982,057
		Total cost of revenues		$	690,893	$	701,909	$	2,675,723	$	2,838,758
	Revenues excluding TAC:
		Gross profit		$	1,011,555	$	1,130,089	$	3,749,956	$	4,130,516
		Other cost of revenues			216,380		273,040		809,799		982,057
		Revenues excluding TAC		$	1,227,935	$	1,403,129	$	4,559,755	$	5,112,573
	Revenues excluding TAC by segment:
		United States:
		Gross profit		$	746,119	$	836,420	$	2,761,829	$	3,043,311
		Other cost of revenues			175,786		221,362		659,841		795,191
		Revenues excluding TAC		$	921,905	$	1,057,782	$	3,421,670	$	3,838,502
		International:
		Gross profit		$	265,436	$	293,669	$	988,127	$	1,087,205
		Other cost of revenues			40,594		51,678		149,958		186,866
		Revenues excluding TAC		$	306,030	$	345,347	$	1,138,085	$	1,274,071
	Operating income before depreciation, amortization, and stock-based compensation expense:
		Income from operations		$	307,827	$	191,237	$	940,966	$	695,413
		Depreciation and amortization			137,487		177,723		540,021		659,195
		Stock-based compensation expense			95,075		158,102		424,930		572,427
		Operating income before depreciation, amortization, and stock-based compensation expense		$	540,389	$	527,062	$	1,905,917	$	1,927,035
	Operating income before depreciation, amortization, and stock-based compensation expense by segment:
		Operating income before depreciation, amortization, and stock-based compensation expense - United States		$	410,239	$	391,339	$	1,451,656	$	1,433,617
		Operating income before depreciation, amortization, and stock-based compensation expense - International			130,150		135,723		454,261		493,418
		Operating income before depreciation, amortization, and stock-based compensation expense		$	540,389	$	527,062	$	1,905,917	$	1,927,035
		United States:
		Income from operations		$	215,500	$	102,445	$	632,895	$	380,808
		Depreciation and amortization			110,279		144,752		437,080		536,151
		Stock-based compensation expense			84,460		144,142		381,681		516,658
		Operating income before depreciation, amortization, and stock-based compensation expense - United States		$	410,239	$	391,339	$	1,451,656	$	1,433,617
		International:
		Income from operations		$	92,327	$	88,792	$	308,071	$	314,605
		Depreciation and amortization			27,208		32,971		102,941		123,044
		Stock-based compensation expense			10,615		13,960		43,249		55,769
		Operating income before depreciation, amortization, and stock-based compensation expense - International		$	130,150	$	135,723	$	454,261	$	493,418
	Free cash flow:
		Cash flow from operating activities		$	167,357	$	657,311	$	1,371,576	$	1,954,326
		Acquisition of property and equipment, net			(131,550)		(192,431)		(689,136)		(602,276)
		Dividends received			-		-		(12,908)		(15,156)
		Excess tax benefits from stock-based awards			242,152		(134,491)		597,118		-
		Free cash flow		$	277,959	$	330,389	$	1,266,650	$	1,336,894

Yahoo! Inc.
Reconciliation of GAAP Net Income and GAAP Net Income Per Share to Non-GAAP Net Income and Non-GAAP Net Income Per Share
(in thousands, except per share amounts)
			Three Months Ended
			December 31,
				2006		2007
	GAAP Net income		$	268,673	$	205,723
	(a)	Stock-based compensation as measured using the fair value method under SFAS 123R		95,075		158,102
	(b)	Non-cash gain arising from increased dilution of our ownership in Alibaba, resulting in the recognition of a further gain on the sale of Yahoo! China		-		(6,842)
	(c)	To adjust the provision for income taxes to eliminate tax charges and credits related to tax adjustments recorded in the current period		(28,690)		(37,298)
	(d)	To adjust the provision for income taxes to reflect an effective tax rate of 40% in both the three month periods ended December 31, 2006 and 2007 and to reflect the tax impact of items (a) and (b) in both periods		(38,558)		(39,198)
	Non-GAAP Net income excluding stock-based compensation expense and other items		$	296,500	$	280,487
	GAAP Net income per share - diluted		$	0.19	$	0.15
	Non-GAAP Net income excluding stock-based compensation expense and other items per share - diluted		$	0.21	$	0.20
	Shares used in per share calculations - diluted			1,419,143		1,394,656
			Year Ended
			December 31,
				2006		2007
	GAAP Net income		$	751,391	$	660,000
	(a)	Stock-based compensation as measured using the fair value method under SFAS 123R		424,930		572,427
	(b)	Reversal of an earn-out accrual		(10,000)		-
	(c)	Non-cash gain arising from increased dilution of our ownership in Alibaba, resulting in the recognition of a further gain on the sale of Yahoo! China		(14,316)		(8,066)
	(d)	To adjust the provision for income taxes to eliminate tax charges and credits related to tax adjustments recorded in the current period		(11,341)		(50,592)
	(e)	To adjust the provision for income taxes to reflect an effective tax rate of 40% in both the years ended December 31, 2006 and 2007 and to reflect the tax impact of items (a) through (c) in both periods		(130,094)		(179,072)
	Non-GAAP Net income excluding stock-based compensation expense and other items		$	1,010,570	$	994,697
	GAAP Net income per share - diluted		$	0.52	$	0.47
	Non-GAAP Net income excluding stock-based compensation expense and other items per share - diluted		$	0.69	$	0.71
	Shares used in per share calculations - diluted			1,457,686		1,404,654

Yahoo! Inc.
Business Outlook
The following business outlook is based on current information and expectations as of January 29, 2008. Yahoo!'s business outlook as of today is expected to be available on the Company's Investor Relations website throughout the current quarter. Yahoo! does not expect, and undertakes no obligation, to update the business outlook prior to the release of the Company's next quarterly earnings announcement, notwithstanding subsequent developments; however, Yahoo! may update the business outlook or any portion thereof at any time at its discretion.
			Three Months	Year
			Ending	Ending
			March 31,	December 31,
			2008	2008
	Revenues		$1,680 - $1,840	$7,200 - $8,000
	Revenues excluding TAC(1) outlook (in millions):
		Gross profit	$1,030 - $1,100	$4,320 - $4,800
		Other cost of revenues	250 - 280	1,030 - 1,150
		Revenues excluding TAC	$1,280 - $1,380	$5,350 - $5,950
	Operating income before depreciation, amortization, and stock-based compensation expense (1) outlook (in millions):
		Income from operations	$100 - $110	$545 - $655
		Depreciation and Amortization	160 - 180	670 - 750
		Stock-based compensation expense	140 - 160	510 - 570
		Operating income before depreciation, amortization, and stock-based compensation expense	$400 - $450	$1,725 - $1,975
		(1) Refer to Note to Unaudited Condensed Consolidated Statements of Income.

Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
					Three Months Ended				Year Ended
					December 31,				December 31,
					2006		2007		2006		2007
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income			$	268,673	$	205,723	$	751,391	$	660,000
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation			84,431		109,433		302,161		409,366
		Amortization of intangible assets			53,056		68,290		237,860		249,829
		Stock-based compensation expense			95,075		158,102		424,930		572,427
		Tax benefits from stock-based awards			255,460		(94,545)		626,009		76,138
		Excess tax benefits from stock-based awards			(242,152)		134,491		(597,118)		-
		Deferred income taxes			(178,977)		(78,157)		(274,433)		(212,742)
		Earnings in equity interests			(33,853)		(52,888)		(112,114)		(150,689)
		Dividends received			-		-		12,908		15,156
		Minority interests in operations of consolidated subsidiaries			238		3,958		712		2,850
		Gains from sale of investments, assets and other, net			686		(15,132)		(15,125)		(27,928)
		Changes in assets and liabilities, net of effects of acquisitions:
			Accounts receivable, net		(138,416)		(82,357)		(185,196)		(88,738)
			Prepaid expenses and other		18,685		72,126		(9,567)		133,185
			Accounts payable		(36,572)		33,028		30,413		45,101
			Accrued expenses and other liabilities		35,779		133,996		174,566		184,805
			Deferred revenue		(14,756)		61,243		4,179		85,566
	Net cash provided by operating activities				167,357		657,311		1,371,576		1,954,326
CASH FLOWS FROM INVESTING ACTIVITIES:
	Acquisition of property and equipment, net				(131,550)		(192,431)		(689,136)		(602,276)
	Purchases of marketable debt securities				(439,492)		-		(1,328,515)		(1,105,043)
	Proceeds from sales and maturities of marketable debt securities				520,117		388,281		1,951,323		2,243,720
	Acquisitions, net of cash acquired				(80,972)		(618,063)		(142,272)		(973,577)
	Purchase of intangible assets				(5,810)		(35,003)		(5,810)		(110,378)
	Other investing activities, net				2,253		5,421		20,729		(24,948)
	Net cash used in investing activities				(135,454)		(451,795)		(193,681)		(572,502)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Proceeds from issuance of common stock, net				86,652		131,177		318,103		375,066
	Repurchases of common stock				-		(220,684)		(1,782,140)		(1,585,910)
	Structured stock repurchases, net				-		-		(227,705)		(250,000)
	Excess tax benefits from stock-based awards				242,152		(134,491)		597,118		-
	Other financing activities, net				-		(2,706)		-		(16,591)
	Net cash provided by (used in) financing activities				328,804		(226,704)		(1,094,624)		(1,477,435)
Effect of exchange rate changes on cash and cash equivalents					23,905		7,168		56,907		39,670
Net change in cash and cash equivalents					384,612		(14,020)		140,178		(55,941)
Cash and cash equivalents, beginning of period					1,185,259		1,527,950		1,429,693		1,569,871
Cash and cash equivalents, end of period				$	1,569,871	$	1,513,930	$	1,569,871	$	1,513,930
Supplemental schedule of acquisition-related activities:
	Cash paid for acquisitions			$	81,882	$	639,078	$	150,859	$	1,019,755
	Cash acquired in acquisitions				(910)		(21,015)		(8,587)		(46,178)
				$	80,972	$	618,063	$	142,272	$	973,577
	Common stock, restricted stock and stock options issued in connection with acquisitions			$	3,256	$	104,212	$	3,256	$	572,221

Yahoo! Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
			December 31,		December 31,
			2006		2007
	ASSETS
	Current assets:
		Cash and cash equivalents	$	1,569,871	$	1,513,930
		Short-term marketable debt securities		1,031,528		487,544
		Accounts receivable, net		930,964		1,055,532
		Prepaid expenses and other current assets		217,779		180,716
		Total current assets		3,750,142		3,237,722
	Long-term marketable debt securities			935,886		361,998
	Property and equipment, net			1,101,379		1,331,632
	Goodwill			2,968,557		4,002,030
	Intangible assets, net			405,822		611,497
	Other long-term assets			459,988		503,945
	Investments in equity interests			1,891,834		2,180,917
	Total assets		$	11,513,608	$	12,229,741
	LIABILITIES AND STOCKHOLDERS' EQUITY
	Current liabilities:
		Accounts payable	$	109,130	$	176,162
		Accrued expenses and other current liabilities		1,046,882		1,006,188
		Deferred revenue		317,982		368,470
		Short-term debt		-		749,628
		Total current liabilities		1,473,994		2,300,448
	Long-term deferred revenue			64,939		95,129
	Long-term debt			749,915		-
	Other long-term liabilities			36,890		28,086
	Deferred and other tax liabilities, net			19,204		260,993
	Minority interests in consolidated subsidiaries			8,056		12,254
	Stockholders' equity			9,160,610		9,532,831
	Total liabilities and stockholders' equity		$	11,513,608	$	12,229,741

CONTACTS:
Yahoo! Inc.
Diana Wong, 408-349-4391 (Media Relations)
dianaw@yahoo-inc.com
Cathy La Rocca, 408-349-5188 (Investor Relations)
cathy@yahoo-inc.com