With Yahoo! The world has become their marketplace. Consumers enjoy shopping when they can choose from the best stores and the best selection. A successful business knows how to find customers, and target products to their needs. Through Yahoo! A successful business satisfies the needs of its customers, wherever they are. When I am at an event or waiting for an elevator, I am often asked to describe what kind of business we are in.
The concept behind Yahoo! This concept is appealing to people, and I believe that is a key reason why Yahoo! In , we continued to carefully manage the business and invest in aggressively growing our leadership position while delivering consistently increasing profits on a pro forma basis, and value to our users, customers, and shareholders.
We built an increasingly stronger business by anticipating, affecting, and adapting to the remarkable growth and changes in the industry. As the Internet has grown and changed, so has Yahoo! Since the formation of Yahoo!
It encompasses a broad vision and allows us numerous ways to aggressively grow our business. As an independent, comprehensive global branded network of Web properties and services, Yahoo!
We have built a powerful platform used by advertisers, merchants, and content providers to reach large, targeted audiences to grow their businesses in part- nership with us. We have always been very focused on acquiring and retaining as large and as broad a global audience as possible.
By strategic choice, we have remained independent with regard to the content or merchant services we aggregate on behalf of our worldwide users. Users highly value choice, and our unique posi- tion is that of the independent, open aggregator of anything and everything users could want to find and get connected to.
The core of our strategy has been to build a platform business that satisfies the needs of the largest global audience possible, and in a way that has Yahoo! We have always reasoned that if we were to be successful in doing this, we would have millions of people coming to Yahoo! We would then use actual consumption patterns to address their needs for content, merchant services, and communication services. The result is a powerful, self- reinforcing distribution platform for an ever-increasing array of content, communication services, and merchant services.
It also drives a great business model when well managed. By analyst measurements, in the number of 14 regular Web users grew to million and the total dollars spent on Web 11 12 9 10 7 8 5 6 4 3 2 1 Throughout , Yahoo!
We ended with approximately 26 million unique users in the U. Our traffic grew from an average of 65 million page views per day in December to an average of million page views per day in December , again making Yahoo! In , we exhibited the leverage inherent to our business model and, on a pro forma basis, grew our gross margin to 90 percent and our operating margin to 36 percent as a percentage of net revenues in the fourth quarter Our employees are passionate about delivering Web users the best possible experience, and they also understand the value of operating discipline and profitability.
With strong gross margins, positive cash flow, and a healthy balance sheet, we have positioned Yahoo! During the year, Yahoo! At the end of , we had 15 direct, branded versions of Yahoo! People now use Yahoo! We also now offer 13 registered services, 17 enabling Yahoo! We unveiled a major new online shopping service, Yahoo! Shopping, which featured more than 3, merchants and more than 3 million products in , has received accolades from buyers and sellers alike. Our offerings in commerce now also include Yahoo!
Auctions, Yahoo! Classifieds, Yahoo! Employment, Yahoo! Real Estate, and Yahoo! We also introduced a suite of Web solutions to address the needs of the growing number of small businesses and merchants conducting business online.
As we expanded our comprehensive global branded network of Web properties and grew our audience throughout the year, we expanded the extensive suite of integrated marketing services we offer our growing set of advertisers and merchant partners, and are well positioned as dollars spent on Web advertising and electronic commerce grow.
During the fourth quarter, we expanded Yahoo! We have remained open with regard to how users get their physical access to the Web and to what physical device they use, and have been aggressive in striking distribution relationships with a range of PC, access, and device providers to this end. In fact, already in the first quarter of , we have entered significant distribu- tion agreements with Gateway, IBM, Hewlett-Packard, and Toshiba, making Yahoo!
Our goal has always been to make Yahoo! You can expect to be another year of exciting developments. We are in a market that is big and getting bigger. The number of Internet users and the dollars spent on Web advertising and online commerce is projected to continue growing. We will continue to execute on our strategy to be the one place any- one needs to go to find and get connected to anything or anybody, on a global basis, regardless of what device or access is used.
Since the founding of Yahoo! Over the past year and a half, we have also successfully developed the process of acquiring and integrating other companies. We have acquired six companies in that time and have successfully integrated all of them into Yahoo!. Developing this expertise has been a key internal goal and one which should serve us well in aggressively growing our business in the future of this highly competitive industry. During , we plan to continue to make acquisitions that make good strategic and financial sense.
We also will continue to invest in key international areas to leverage and extend our already strong position and increase share in those markets. In online commerce and shopping, you can expect to see us extend aggressively by broadening and deepening the range of consumer buying, transaction, and fulfillment services we provide across all major categories.
You can also expect us to broaden the full line of direct marketing services we already provide our advertisers and merchant partners. With an enormous base of loyal users, Yahoo! We are building a large business and strongly believe that by putting our users first and delivering the best Web experience available, our users, partners, employees, and shareholders will all benefit. The growth and success of our business to date would not be possible without all of you, and I want to thank you for your continued support.
We look forward to the next year! The fusion of these complemen- tary and related activities results in a tightly integrated experience for users. People use Yahoo! The Company was incorporated in California on March 5, and commenced operations on that date. In August , the Company commenced selling advertisements on its Web pages and recognized its initial revenues.
In April , the Company completed its initial public offering. Under the terms of the acquisition, which was accounted for as a pooling of inter- ests, the Company exchanged 6,, shares of Yahoo! Common Stock. These costs consisted of investment banking fees, legal and accounting fees, redundancy costs, and certain other expenses directly related to the acquisition.
On June 10, , the Company completed the acquisition of all outstanding shares of Viaweb Inc. Yahoo likewise expanded its unwavering client base to 35 million.
Notwithstanding the income news, a few chiefs at Hurray today got advancements. Head working official Jeff Mallett will likewise expect the part of president and will turn into an individual from the association's directorate. Prior in the day, the organization's offer value fell as much as 11 percent on worry that the stock, alongside portions of other Web organizations, might be exaggerated, experts said. Hurray, which has increased 75 percent so far this year, fell Offers in the Santa Clause Clara , California -put together firm dropped with respect to worry that Web stocks may have risen excessively far excessively fast, said Bruce Smith , expert with Jefferies and Organization.
In spite of the fact that Yahoo beat income desires today and split its offers, those moves eventually might be figured into the offer value, Smith said. Who has a "purchase" rating on Hurray shares? Different investigators and industry onlookers see Hurray's solid profit results as a sign of the organization's expanding image power, just as its capacity to create income through the hefty traffic it gets.
They will be giving close consideration to the organization's internet business figures so as to survey the criticalness of those numbers in Yahoo's general Web income picture, particularly behind a solid occasion web based business season. As per Earthy colored Siblings Harriman value expert First light Simon, the present income could show the developing potential for online organizations to get gainful.
Simon included that the organization's solid outcomes this quarter additionally may start expanded general certainty among more customary speculators in the Web space - which hitherto has been set apart by soaring stock valuations notwithstanding untested plans of action.
Tim Koogle, formerly president and chief executive, will become chief executive and chairman. Chief operating officer Jeff Mallett will also assume the role of president and will become a member of the firm's board of directors.
Earlier in the day, the company's share price fell as much as 11 percent on concern that the stock, along with shares of other Internet companies, may be overvalued, analysts said. Yahoo, which has gained 75 percent so far this year, fell Although Yahoo beat earnings expectations today and split its shares, those moves ultimately may be factored into the share price, Smith said. Other analysts and industry observers view Yahoo's strong earnings results as an indication of the company's increasing brand power, as well as its ability to generate revenue through the heavy traffic it receives.
They will be paying close attention to the company's e-commerce figures in order to assess the significance of those numbers in Yahoo's overall Web revenue picture, especially on the heels of a strong holiday e-commerce season. According to Brown Brothers Harriman equity analyst Dawn Simon, today's earnings could indicate the growing potential for online companies to become profitable.
Simon added that the company's strong results this quarter also may spark increased general confidence among more traditional investors in the Internet space--which thus far has been marked by skyrocketing stock valuations in spite of untested business models. Today's earnings results were released against the backdrop of a recent stock frenzy that sent Internet stocks such as Yahoo and Lycos surging to all-time highs.
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