*Yahoo! Reports Fourth Quarter and Full Year 2011 Results*

Fourth Quarter Operating Income Increases 10% Year over Year

SUNNYVALE, Calif.–(BUSINESS WIRE)– Yahoo! Inc. (NASDAQ: YHOO) today reported results for the fourth quarter and full year ended December 31, 2011.

Revenue excluding traffic acquisition costs (“revenue ex-TAC”) was $1,169 million for the fourth quarter of 2011, a 3 percent decrease from the fourth quarter of 2010. Income from operations increased 10 percent to $242 million in the fourth quarter of 2011, compared to $220 million in the fourth quarter of 2010. GAAP revenue was $1,324 million for the fourth quarter of 2011, a 13 percent decrease from the fourth quarter of 2010. Revenue ex-TAC was $4,381 million for the full year ended December 31, 2011, a 5 percent decrease from the same period of

2010. The year over year decrease was primarily due to the revenue share related to the Search Agreement with Microsoft. Income from operations increased 4 percent to $800 million for the full year ended December 31, 2011, compared to $773 million for the same period of 2010.

GAAP revenue was $4,984 million for the full year ended December 31, 2011, a 21 percent decrease from the same period of 2010, primarily due to the required change in revenue presentation related to the Search Agreement and the associated revenue share with Microsoft.Net earnings per diluted share was $0.24 in both the fourth quarter of 2011 and the fourth quarter of 2010.

*Business Highlights*

· l Yahoo! is home to 11 number one properties globally and ranks in the top three in 20 categories worldwide. (comScore, December 2011)

· l Yahoo! continued to modernize its technology platforms, with additional sites across the Americas, EMEA and Asia Pacific going live on the new global Yahoo! Publishing Platform, bringing the total more than 130.

· l Yahoo! acquired interclick, inc., which has built an industry-leading data valuation platform optimized to work with large data volumes across multiple providers and marketplaces.

· l Yahoo!, AOL and Microsoft announced agreements to allow ad networks operated by the three companies to offer each other’s premium nonreserved online display inventory to their respective advertising customers.

· l Yahoo! launched its 2012 U.S. presidential election programming, beginning with exclusive ABC News and Yahoo! News “Newsmaker” interviews with Republican candidates.

· l Yahoo! launched Livestand, a personalized living magazine for iPad. Livestand weaves together content from leading third-party publishers and Yahoo!’s global media network to create a visually stunning and deeply personalized digital experience tailored to its users’ interests and passions.

· l Yahoo! introduced additional products for the iPad such as Yahoo! Mail and IntoNow, an app that makes watching TV more engaging, social and fun.

· l Yahoo!, in conjunction with Playtone and Reliance Entertainment, will be the exclusive online broadcast partner for Tom Hanks’ multi-dimensional animated series “Electric City”.

*Search Alliance Impact*

Yahoo!’s results for the fourth quarter of 2011 reflect $48 million in search operating cost reimbursements from Microsoft under the Search Agreement, which amount is equal to the search operating costs incurred by Yahoo! in the fourth quarter. Search operating cost reimbursements are expected to decline as Yahoo! fully transitions all markets to Microsoft’s search platform and, in the long term, the underlying expenses are not expected to be incurred under Yahoo!’s cost structure. Our business outlook for total expenses reflects these anticipated savings. As previously reported, Microsoft has agreed to extend the RPS Guarantee in the U.S. and Canada through March 2013.

*Fourth Quarter 2011 Revenue Highlights*

· Display revenue ex-TAC was $546 million, a 4 percent decrease compared to $567 million for the fourth quarter of 2010.

· GAAP display revenue was $612 million, a 4 percent decrease compared to $635 million for the fourth quarter of 2010.

· Search revenue ex-TAC was $376 million, a 3 percent decrease compared to $388 million for the fourth quarter of 2010.

· GAAP search revenue was $465 million, a 27 percent decrease compared to $640 million for the fourth quarter of 2010.

*Cash Flow and Cash Balance*

· Cash flow from operating activities for the fourth quarter of 2011 was $431 million, a 7 percent increase compared to $403 million for the same period of 2010.

· Free cash flow was $327 million for the fourth quarter of 2011, a 111 percent increase compared to $155 million for the same period of 2010.

· Cash, cash equivalents, and investments in marketable debt securities were $2,530 million at December 31, 2011 compared to $3,629 million at December 31, 2010, a decrease of $1,099 million. During the fourth quarter of 2011,

Yahoo! repurchased 27 million shares for $416 million. During the year ended December 31, 2011, Yahoo! repurchased 110 million shares for $1,619 million.

*Business Outlook*

Revenue ex-TAC for the first quarter of 2012 is expected to be in the range of $1,025 million to $1,105 million. Based on the terms of the Search Agreement with Microsoft, Microsoft retains a revenue share of 12 percent of the net (after TAC) search revenue generated on Yahoo! Properties and Affiliate sites in transitioned markets. Yahoo! reports the net revenue it receives

under the Search Agreement as revenue and no longer presents the associated TAC within cost of revenue. Accordingly, for transitioned markets Yahoo! reports GAAP revenue associated with the Search Agreement on a net (after TAC) basis rather than a gross basis. For markets that have not yet transitioned, revenue continues to be recorded on a gross basis, and TAC is

recorded in cost of revenue. GAAP revenue for the first quarter of 2012 is expected to be in the range of $1,170 million to $1,260 million. Total expenses (cost of revenue plus total operating expenses) for the first quarter of 2012 is expected to be in the range of $1,065 million to $1,105 million. Total expenses less TAC for the first quarter of 2012 is expected to be in the range of $920 million to $950 million. Income from operations for the first quarter of 2012 is expected to be in the range of $105 million to $155 million. Business outlook for revenue ex-TAC is being provided to reflect the underlying dynamics of the business during the Microsoft transition and to facilitate comparisons to prior periods.

*Conference Call*

Yahoo! will host a conference call to discuss fourth quarter and full year 2011 results at 5 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://investor.yahoo.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 for one week following the conference call by calling (888) 286-8010 or (617) 801-6888, reservation number: 89954272.

Note Regarding Non-GAAP Financial MeasuresThis press release and its attachments include the following financial measures defined as non-GAAP This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the

Securities and Exchange Commission (“SEC”): revenue ex-TAC; free cash flow; total expenses less TAC; non-GAAP net income; and non-GAAP net income per diluted share. These measures may be different than 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”). Explanations of the Company’s non-GAAP financial measures and reconciliations of these financial measures to the GAAP financial measures the Company considers most comparable are included in the accompanying “Note to Unaudited Condensed

Consolidated Statements of Income,” “Supplemental Financial Data,” “GAAP Net Income to Non-GAAP Net Income

*About Yahoo!*

Yahoo! is the premier digital media company, creating deeply personal digital experiences that keep more than half a billion people connected to what matters most to them, across devices and around the globe. And Yahoo!’s unique combination of Science + Art + Scale connects advertisers to the consumers who build their businesses. Yahoo! is headquartered in Sunnyvale, California. For more information, visit the pressroom ( pressroom.yahoo.net) or the company’s blog, Yodel Anecdotal (yodel.yahoo.com). “Affiliates” refers to the third-party entities that have integrated Yahoo!’s advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”). “RPS Guarantee in the U.S. and Canada” refers to Microsoft’s obligation under the Search Agreement to guarantee Yahoo!’s revenue per search in the U.S. and Canada on Yahoo! Properties following the transition of paid search services to Microsoft’s platform in those markets which was completed in the fourth quarter of 2010.

“Search Agreement” refers to the Search and Advertising Services and Sales Agreement between Yahoo! and Microsoft Corporation, as amended. “TAC” refers to traffic acquisition costs. TAC consists of payments to Affiliates and payments made to companies that direct consumer and business traffic to Yahoo! Properties. “Yahoo! Properties” refers to the online properties and services that Yahoo! provides to users.

This press release and its attachments contain forward-looking statements concerning Yahoo!’s expected financial performance (including, without limitation, statements and information in the Business Outlook and Search Alliance Impact sections and the quotation from management), as well as Yahoo!’s strategic and operational plans. Risks and uncertainties may cause actual

results to 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 impact of management and organizational changes; uncertainties relating to Yahoo!’s comprehensive strategic review; the implementation and results of Yahoo!’s ongoing

strategic and cost initiatives; Yahoo!’s ability to compete with new or existing competitors; reduction in spending by, or loss of, advertising customers; risks related to Yahoo!’s regulatory environment; interruptions or delays in the provision of Yahoo!’s services; security breaches; acceptance by users of new products and services; risks related to joint ventures and the

integration of acquisitions; risks related to Yahoo!’s international operations; failure to manage growth and diversification; adverse results in litigation, including intellectual property infringement claims and derivative and class actions; Yahoo!’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; general economic conditions and changes in economic conditions; and transition and implementation risks associated with the Search Agreement with Microsoft Corporation. All information set forth in this press release and its attachments is as of January 24, 2012. Yahoo! does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances; however, Yahoo! may update its Business Outlook or any portion thereof at any time in its discretion. 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, 2010, as amended, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, which are on file with the SEC and available on 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, 2011, which will be filed with the SEC in the first quarter of 2012.

Yahoo!, Livestand, 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.