Yahoo!2004AnnualReport

CorporateHeadquarters

701FirstAvenueSunnyvale,CA94089

OtherU.S.Operations

Dallas,TXNewYork,NYPasadena,CASantaMonica,CA

WorldYahoo!’sAsiaPacific

Australia&NewZealandChinaSingaporeTaiwanJapanKoreaIndia

Americas

CanadaArgentinaBrazilMexico

Europe

UK&IrelandDenmarkFranceGermanyItalyNetherlandsScandinaviaSpain

IndependentRegisteredPublicAccountingFirm

PricewaterhouseCoopersLLPSanJose,California

TransferAgent

EquiServeTrustCompany,N.A.P.O.Box43023Providence,RI02940-3023

Yahoo!InvestorRelations

701FirstAvenue,BuildingDSunnyvale,CA94089Acopyofthisreportcanbefoundonlineat:http://yhoo.client.shareholder.com/

AnnualStockholdersMeeting

TheannualmeetingofstockholderswillbeheldMay19,2005,at10:00am,attheSantaClaraConventionCenter,5001GreatAmericaParkway,SantaClara,CA.

©2005Yahoo!andtheYahoo!logosaretrademarksand/orregisteredtrademarksofYahoo!Inc.Otherregisteredtrademarksinclude:HotJobs,Inktomi,Kelkoo,Musicmatch,Overture,andYahooligans.Allothernamesaretrademarksand/orregisteredtrademarksoftheirrespectiveowners.

ToYahoo!’sshareholders,users,partners,customersandemployees:

ThismarksmyfourthletterasChairmanandCEO,anditisapersonalprivilegeformetoleadthisexcitingandconstantlyevolvingorganization.AsIwrite,wehavejustfinishedcelebratingYahoo!’stenthyearasacompany.ThemilestoneisanimportanttimetoreflectonwhatYahoo!andtheInternethaveachievedoverthepast10years.SincetheInternetwascommercializedinthemid-90s,ithasachievedmorerapidadoptionthananyothernewmedium,andYahoo!hasbecomethemosttraffickedInternetsiteintheworld.Yahoo!’sfounders,DavidFiloandJerryYang,originallystartedouttomaketheInternetmoreusefulbyorganizinglinksthathelpedpeoplefindinformationontheInternet.Yahoo!’sserviceshaveexpandedasthemarkethasevolved,butDavidandJerry’soriginalgoalremainsatthecoreofourmissiontoday,whichis“tobethemostessentialglobalInternetserviceforusersandbusinesses.”Iamsurethatchangeandinnovationwillbeevenmorerapidandprofoundoverthenext10years.Thethingsthatwehavealldreamtofforthepastfewyears,suchastheconvergenceofPCs,mobiledevices,televisionsetsandentertainmentunits,isjustnowstartingtohappen.Thenext10yearsisgoingtobeabouttheintegrationofeveryone’sinformationandentertainmentdevicesandYahoo!planstobeatthecoreofthisinfrastructure.Our2004resultsareafantasticwaytobeginthenextdecade.Iamveryproudofthehardwork,dedication,andaccomplishmentsthatYahoo!employeesthroughouttheworldhavedelivered.Fullyear2004revenuewas$3.6billion,morethandoublethe$1.6billionin2003.Wedeliveredrecordrevenueseveryquarteraswebenefitedfromthediversitywithinourcorebusinessesofadvertisingandpremiumservices.Yahoo!’sbalancesheetalsogrewthroughouttheyearto$3.7billionincashandmarketabledebtsecurities,excludinganother$816millioninmarketableequitysecuritiesthatweplantosellovertime.Ourgrowingcashandmarketabledebtsecuritiesbalanceisatestamenttothehighcashproductivityofourbusinessmodel.Weareactivelyinvestingsomeofthiscashtodrivefuturevalueforshareholdersthroughacquisitions,investments,andsharerepurchaseactivity,asappropriate.Iencourageyoutoreadmoreaboutourfinancialresultsinthematerialswhichaccompanythisletter.OurterrificresultsweregeneratedbyYahoo!’sdrivetofurtherextenditsleadershipposition

We have lived by the mantrathat great services lead to agreat business, and our strongperformance on the user front hastranslated into better business byenabling us to provide greatervalue to our advertisers.