Financial OverviewTIM MORSE

Value Creation

Operational Framework

Best-in-Class Properties

Reach and Scale

Science and Know-how

Re-aligned Cost Structure

Search Agreement

Rich Data

People

Leverage Key Strengths

Product Innovation

User Insights

Brand Value

Engagement $

Search Experiences

Editorial as Competitive Advantage

Continue to Improve and Evolve

Execution

Growth

M&A

Complexity

Global Platforms

Focus, Prioritization, Accountability

Fix Now

} Credibility

Value Creation

Business Priorities• Growth• Margin Expansion• Disciplined Resource Allocation• Capital Efficiency

Innovation

Monetization

Execution

Maximize Free Cash Flow

Fund M&A

Offset Equity Dilution

Build Execution Machine

Simplify

Focus on ROI

Expand Margins

Operational:Share in Yahoo! Japan success

Strategic: Participate in China growth

through Alibaba

Financial Framework

Total Yahoo! Valuation

Cash Core Business Asian Assets

Revenue

MonetizeInsights

MaintainValue Proposition

Next-GenExperience

PortfolioManagement

O&O Search~$1.5B

Fees, Listings & Other

~$1.2B

O&O Display~$1.7B

Revenue: 2009E

Please note: 2009 revenue segments calculated using 2009 actuals through Q3’09 plus the midpoint of Q4’09 revenue guidance.

Affiliates~$2.0B

Revenue Ex-TAC

Intelligent supply and demand shaping

International UU growth

Matching relevance

Better utilized existing inventory

Multi-objective optimization

Web analytics

Pricing accuracy

Yield optimization

Video

Behavioral targeting

Marketplace design

Rich ads

Insights-ROI

Offline-online behavioral convergence

Editorial click enhancement Easy to do business with

Content optimization

Revenue Levers

INNOVATION MONETIZATION

EXECUTION

Search volume User experience

Revenue Growth PrioritiesRevenue Opportunity

5% of U.S. Ad Revenue Share Shift = $650

million1

Close 50% of RPS Gap in U.S. = ~$300 million2

Increase International ARPU by 50% = $500+

million annually3

• Win in Display

• Grow Search Volume & RPS

• Improve Monetization of International Audience#3

#1

#2

Note 1: Source Veronis Suhler Stevenson Communications Industry Forecast (2009).Note 2: Source: Internal Yahoo! Estimates. RPS gap compared to market leader.Note 3: Source: Internal Yahoo! Estimates.

Cost Optimization

P&L impacts over time

Cost Management Overview

Phase I

Budget Discipline

Differentiation

Plan for Efficiency

Phase III

Simplify and Streamline

Structural Changes

Continuous Improvement

Phase II

Self-funding Mentality

Right-sourcing

Invest for Productivity

Be Lean

Fund ROI

Development

Analytical

Compliance

Support Transactional

Differentiating Costs

Breakworkforcecosts intoactionablecategories

OSP

Marketing

Other

Cost of Revenue

Workforce

~$3B

Traditional View

Repositioning Cost Structure

Resource Optimization

Engineers & Salespeople

Low-cost Centers of Excellence

$

Organizational Efficiency

Global Functions & Priorities

Cost Optimization @ Scale

$

Smarter Solutions

System & Platform Investments

Cloud Deployment & Tech Refresh

$

Better Infrastructure Utilization

Automation & Standardization

Low-cost DCs & Flattened Networks

$

Structural Opportunities

Engineering Productivity

1x OutputUp to 2xOutput

Structural Opportunities

Geographic Resources

Undifferentiated, Organic Differentiated, Planned

HighCost

HighCost

LowCost

LowCost

Structural Opportunities

Infrastructure

Structural Opportunities

Internal “Plumbing”

Convoluted, Complex Lean, Simple

A B BA

Impact of Search Agreement

• No revenue sharing• All basic Algo and Paid Search costs

funded by Microsoft after regulatoryclearance

• 1st of 3 $50M payments to Yahoo!• Upfront transition costs

Regulatory Clearance Algo Transition U.S. Paid Search

Transition

International Paid Search Transition

• Revenue sharing begins as each market rolls out

• Headcount transitions completed and remaining Yahoo! support cost rationalized

• 2nd and 3rd $50M payments to Yahoo!

2010 Modeling 2011-12 Modeling

Will guide & report together

Early 2010 Within 12 months Within 12 months Within 24 months

Please note: Additional detail on the terms of the agreement can be found in Yahoo!’s 8-K dated July 29, 2009.

Financial Metrics

“New” Financial Metrics

• GAAP Operating Income• GAAP Net Income & EPS

Profitability

• Operating Margin Rate• Return on Invested Capital

Efficiency

• GAAP Cash Flows from Operating Activities• Free Cash FlowCash Generation

“New”

“New”

1. Amount shown by dotted line is non-GAAP and excludes a goodwill impairment charge of $488 million. In 2008, GAAP Operating Income was $13 million, GAAP Operating Margin was 0.2% and Return on Invested Capital was 0%.

2. 2008 GAAP Net Income includes a $401 million non-cash gain related to Alibaba Group’s initial public offering of Alibaba.com.

Note: Operating Margin is calculated as Operating Income / Revenues. Return on Invested Capital represents Operating Income After Tax divided by Average Invested Capital; it is calculated as: (Operating Income x (1 – Effective Tax Rate)) / (2-yr average of Stockholders’ Equity + Interest Bearing Debt – Cash & Cash Equivalents – Investments in equity interests). Effective Tax Rate is calculated as (Provision for income taxes) / (Income before provision for income taxes, earnings in equity interests, and minority interests).

GAAP Operating Income

2006 2007 2008 2009E

$941M

$413M

1

2006 2007 2008 2009E

GAAP Operating Margin Rate15%

6%

1

2006 2007 2008 2009E

GAAP Net Income & EPS

$732M$589M

51¢ 41¢

2

2006 2007 2008 2009E

Return on Invested Capital14%

5%

1

2010-2012 Financial Objectives

15-20% Operating Margin Rate

Accelerate Revenue Growth

15-20% Return on Invested CapitalReturns

~3x2009

3-4x2009

Margins

Revenue