National Grocers by Vitamin Cottage

NASDAQ: YHOO2/28/2012Turner NovakMark Blazo

Buy 100 shares @ $21.31 $2,1314.71% of portfolio

Yahoo OverviewFounded in 1995Sunnyvale, CA14,100 employees

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Yahoo Today2nd largest online advertising platform240+ Million usersPersonalized digital contentCommunications, Search, and MediaNot just a search engine5Yahoo TomorrowNew executive teamHire/Buy talented employees/programmers

Transition from media to mobileMonetize mobile offeringsImprove advertisers capabilities to create and manage their own ad campaigns across Yahoos network

6Q4 Earnings Call TakeawaysRevenue was flatEarnings upLots of excess cashContinue share buybacksContinue acquisitionsCommercializing and monetizing productsTransition from display ads to mobile adsJust under 200 million mobile users

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Q4 Earnings Call TakeawaysCurrently 75 mobile appsReducing to about 12Remodel the 12 apps that will stay in the portfolio

Continue acquiring companies between $10 - $100 Million to buy talented programmers8New Management TeamCEO - Marissa MayerGoogles 20th employeeVP of Search Products, User Experience, Local, Maps, and LocationDeveloped Googles Search and Contextual Discovery

Very involved in hiring new Google employeesPart of 20 acquisitions at GoogleProgrammer Unlike previous Yahoo CEOs

9New Management TeamCFO - Ken GoldmanThree decades of experience in software and internet companiesHistory of fiscal discipline and internal controls

COO Henrique de CastroBrought in to repair Yahoos relationship with big ad agenciesBuilt Googles display advertising business from scratchMonetized Youtube

10New Management TeamVP of People Jackie ResesExperience in Private Equity investing in media and technologyTraining and development of new employeesFirm grasp of acquisitions through PE experience

CMO Kathy SavittCEO of LockerzCMO of American EagleVP of AmazonIn charge of worldwide marketing and branding

11Institutional OwnershipGreenlight Capital, David EinhornPredicted the downfall of Lehman BrothersExposed accounting and inventory problems at Green Mountain Coffee RoastersFirst to discover disclosure changes at Herbalife

Third Point Capital, Daniel LoebExposed previous Yahoo CEO resume blundersPitched for Mayer to become new CEOStrategy for GrowthNot moving away from media completely Media Technology companyTangible products, not just a websiteIntegrate products with users livesIncrease search market shareBring in talented employeesAcquire small, failed startups with talented programmers

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15Current App Portfolio

Flikr vs. InstagramInvestments in Other Companies

Yahoos Value

Core Business21.44 x 29.6% = $6.35 per share 13.2 11.7 3.1 + 1.629.6%Yahoos ValueBought 40% stake in Alibaba (Chinese Amazon) in 2005 for $1 BillionSold half of it for $7.6 Billion in 2012Remaining stake is valued at $7.6 Billion at current Total valuation of $38 BillionProjected IPO by the end of 2014Expected to be valued up to $150 BillionYahoos Value

RisksStrategic search alliance with MicrosoftNo operating system of its ownNot necessary for appsMany different platforms/apps make it difficult for Yahoo to appeal to advertisersLowering number of appsYahoo is a tech companyAlso a media company

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Capable management team in placeCash available to spur growthMobile use globally will continue to increaseThere is no clear Apple of mobile productsWill it be Yahoo?Investment ThesisBuy 100 shares @ $21.31 $2,1314.71% of portfolio