Yahoo Pitchbook

1. Presentation to
Review of Capital Raising Opportunities

2. Education
About MeStefano Cabello
Education:
St. Mary’s University
Honors Program
Majors: Finance and Risk
Management
Contact:
scabello@mail.stmarytx.edu
Volunteer Income Tax
Assistant (VITA)
Duration: 3 months
Role: Finance Intern
• Prepare federal income taxes for
individuals and businesses
through schedule C form.
Standard Insurance
Group:
Duration: 3 months
Role: Underwriting Intern
• Analyzed operational risks
inherent in businesses
• Participated in a project with
claims over $100K
Key Skills:
• Fluent in Spanish
• Advanced Accounting
• Financial Statements Analysis
• Mathematical Background
Why Investment Banking?
I want to have a career where my work
has a direct impact on the capital
markets. I want to learn advanced
financial and valuation models using
quantitative analysis to help companies
raise capital and so I can predict their
future behavior.
Most people don’t know: that I
scuba dive and swam in the oceans of
Greece, Italy, and Mexico
My favorite activities are: I like
to read philosophy and epistemology and
play chess
One place that I would like to
visit:
Rio de Janiero
Something I’ve never
done, but would love to do is:
become one of the first people to space
travel to other galaxies.
Information
Experience
Summer Plans:
Location: San Antonio, TX
Company: Nustar Energy
Position: Risk Management
Intern
Hometown:
San Antonio, TX

3. Education
Experience About Me
Education:
Florida Agricultural and Mechanical
University
Concentrations: Finance
Contact:
sherie1.carter@famu.edu
Sherie Carter
Information
Summer Plans:
Location: Atlanta, GA
Company: JB&T Properties
Position: Intern
Hometown:
Kansas City, MO
JB&T Properties
Duration: 3 months
Role: Summer Intern
• Managed profits and losses and
developed efficient accounts
receivable and accounts payable
databases
• Responsible for advertising property
information for investors
Alpha Kappa Alpha Sorority
Duration: 3 months
Role:AKA Week Committee
• Budget the use of funds for a week of
events every semester
• Network with other organizations to
ensure attendance at events
• Advertise events through social media
outlets
Key Skills:
• Project Management
• Leadership
• Organization
• Work Ethic
Why Investment Banking?
I love working in groups and also
enjoy I am passionate about helping
people find the resources they need
to be successful and I believe as an
Investment Banker I will be helping
businesses succeed by getting the
financial support they need
Most people don’t know: I can
sew
My favorite activity is: sewing
and designing
One place that I would like to
visit:
South Africa.
Something I’ve never
done, but would love to do is:
run a marathon.

4. About Me
Education
Ben Dalusma
Education:
Cornell University,
B.S. Applied Economics and
Management
Concentrations: Finance
Minor: Statistics
Contact:
benjamin.dalusma@gmail.com
Key Skills:
• Fluent in French
• Time Management
• Corporate Ratings and Credit
Analysis
• Data Analysis
• Financial Analysis
Why Investment Banking?
'm interested in investment banking
because I want to apply my
theoretical knowledge of finance in a
fast paced environment. I also want to
learn more about the financial service
industry and be exposed to a deal
and customer focused environment.
Most people don’t know: that
I'm from Port-au-Prince, Haiti..
My favorite activity is: watching
European soccer on week ends.
One place that I would like to
visit:
Australia.
Something I’ve never
done, but would love to do is:
run a marathon
Information
Experience
Summer Plans:
Location: New York, NY
Company: Standard and Poors
Position: Loans and Recovery
Ratings Analytics Analyst
Hometown:
Port-au-Prince, Haiti
Standards and Poor
Duration: 3 months
Role: Ratings Analytics Analyst
• Gather, organize and analyze data
about high yield bond issuers.
• Develop valuation models and
forecasting technique in order to
predict future performance of
companies in the technology sector
• Use different sensitivity analysis to
examine and simulate (company)
performance.
Phi Delta Theta
Duration: 12 months
Role: House Manager and
Treasure
• Create annual budgets for the
fraternity's operation.
• Report different journal entries
for the fraternity's financial
statement to our headquarters.

5. Education
Education:
Cornell University,
B.S. Applied Economics and
Management
Concentrations: Finance and
Strategy
Contact:
kak293@cornell.edu
About MeKelli Keith
Key Skills:
• Strong communication and
leadership skills
• Quantitative data analysis with
statistical modeling
• Diligent
• Detail Orientated
Why Investment Banking?
I am really interested in the
finance, and applying it in a fast pace
environment. I really like the idea of
working with a team to create a
financial solution for the client.
Most people don’t know: I
really enjoy art and crafts and I also
have a project to work on.
My favorite activities are:
watching Netflix and spending
time with my family.
One place that I would like to
visit:
South East Asia.
Something I’ve never done
but would like to do: travel the
world and visit every continent.
Information
Experience
Summer Plans:
Location: Westchester, NY
Company: IBM
Position: Financial Analyst Co-op
Hometown:
Fairfax, VA
IBM
Duration: 6 months
Role: Financial Analyst Co-op
• Consolidated and prepared monthly and
quarterly forecast and close packages on
Business Partner channel revenue
• Enhanced processes for more efficient
reporting and more accurate forecasting of
Business Partner revenue
• Collaborate in teams to create finance
reports and action plans for Business
Partners
EdgeConneX
Duration: 9 months
Role: Operations Intern
• Wrote the user manuals for the company’s
proprietary database detailing step by step
processes for both internal and external
use
• Helped organized financial presentations
for investors; inclusive of slide organization
and packaging of presentations

6. About Me
Education
Rachel Libfraind
Education:
University of Pennsylvania,
Wharton School
Concentrations: Finance and
Operations & Information
Management
Contact:
rlib@wharton.upenn.edu
Recover Care Inc.
Duration: 2 months
Role: Finance Intern
• Helped create new product portfolio
Excel file,
• Made overlay competitor map of
competitor locations
• Created a 6,300 line sales tax write-
off spreadsheet in Excel
• Created tax refund excel file and
individual credit memos
Rotaract Philadelphia:
Duration: 9 months
Role: Vice President of
Membership
• Recruited members and exceeded
the clubs membership goals by
adding over 20 members.
• Organized social events to improve
group dynamics.
• Helped create resume portfolio to
improve membership retention.
Key Skills:
• Spanish proficiency
• Strong communication skills
• Detailed oriented
• Leadership
Why Investment Banking?
I love working in groups and also
enjoy working with quantitative
data, so I feel that IB is a great career
path to combine the two.
Most people don’t know: that I
have hiked in the Andes and visited
Machu Picchu.
My favorite activity is: traveling
with friends and family.
One place that I would like to
visit:
Spain
Something I’ve never
done, but would love to do is:
Skydiving in Argentina, which is
where I will be studying abroad next
semester
Information
Experience
Summer Plans:
Location: Philadelphia, PA
Company: Wharton SPUR Research
Program
Research: Impact of corporate
culture on M&A deals
Hometown:
Princeton Junction, NJ

7. Yahoo! Overview
Headquarters Sunnyvale, California
Founding Founded by Jerry Yang and
David Filo in January 1994
IPO April 1996 at a split adjusted price
of $.54 ($13)
Employees 14,100
Geographic Mix 70% Americas, 30% Rest of World
Product Overview
– Online content
– News
– Email
– Music
– Video
– TV
– Search services
– Local advertising
– Social networking
– Mobile applications
Summary Financial Performance
Trading Overview
Stock Price $27.00
52-week Change 69.28%
S&P 500 52-week Change 15.95%
Avg Vol (3 months) 0.05%
Share Outstanding 1.08B
Market cap 29.21B
Enterprise Value 25.78B
Enterprise Value/EBITDA 19.42B
Year 2010 2011 2012
Revenue 6.32 4.98 4.99
COGS 2.66B 1.54B 1.66B
EBITDA 1.51B 1.47B 1.46B
Net Income 1.23B 1.05B 3.95B
EPS (Basic) 0.91 0.82 3.31
Gross Margin 58% 69% 67%

8. Macro-Economic Outlook
Quantitative Easing Economic Performance
• The Federal Reserve’s $85 billion a month purchase of
government and mortgage back securities has produced
an environment conducive for investment in equity
markets
• Due to the prospects of QE tapering, there has been a
spike in short-term and long-term interest rates and a
subsequent capital outflow in fixed income securities and
a major sell off in the stock markets
• S&P 500: -4.76 %; Dow Jones Industrial Average: -4.30;
MSCI Emerging Market Index: -17.14%; SPDR Barclays
Capital Intermediate Term Corporate Bond ETF: -4.53%
1.51
1.81
2.64
1.3
1.5
1.7
1.9
2.1
2.3
2.5
2.7
2.9 10-Year Treasury Yield
Source: Yahoo finance, Bloomberg, World Bank
• The International Monetary Fund reduced its US growth
forecast from 1.9% to 1.7%
• Unemployment rate: 7.6%
• US economy added 195,000 non-farm jobs in
June, exceeding analyst expectations
• Home prices surged 12.2% in May, highest in 7 years
• 30 Year Fixed Rate Mortgage: from 3.4% in May to over
4.6% in July
• Auto sales grew 9.2% translating into a seasonally
adjusted annual rate of 15.96 million units
-4
-3
-2
-1
0
1
2
3
2007 2008 2009 2010 2011 2012
US GDP Growth

9. Capital Market Considerations
Nasdaq Adjusted Close
2939.52
3160.19
3520.76
2900
3000
3100
3200
3300
3400
3500
3600
7/1/12
8/1/12
9/1/12
10/1/12
11/1/12
12/1/12
1/1/13
2/1/13
3/1/13
4/1/13
5/1/13
6/1/13
7/1/13
iShares Core US Bond Market ETF
Source: Yahoo Finance
109.42
110.07
109.12
110.93
107.01
105
106
107
108
109
110
111
112
7/1/12
8/1/12
9/1/12
10/1/12
11/1/12
12/1/12
1/1/13
2/1/13
3/1/13
4/1/13
5/1/13
6/1/13
7/1/13

10. Industry Considerations
Investment ConsiderationsInternet Data Usage
• 2.7 billion users worldwide as of 1st quarter of 2013
• Global Growth Rate: 566.4% (2012)
• Global Penetration Rate: 34.3% (2012)
• US Social Media Market Share of Visits (May 2013):
-Facebook: 57.28% -Youtube: 24.63%
-Twitter: 1.55% -Yahoo! Answers: 1.16%
-LinkedIn: 1.12% -Tumblr: .51%
83.16%
8.05%
5.35%
1.62%
Desktop Search Market Share
Google - Global
Yahoo - Global
Bing
Baidu
Ask - Global
AOL - Global
Lycos - Global
Excite - Global
• Global Mobile Desktop Search:
-Google: 84.55% -Yahoo: 6.68%
-Bing: 2.71% -Baidu: .69%
Source: MorningStar, internetworldstats.com, Netmarketshare.com, dreamgrow.com
The best mobile Internet companies will create reach
with subscribers, platforms, and developers
Companies will continue to struggle to launch effective
mobile ad products
Companies that deploy a successful social media
strategy will outperform those that create and aggregate
editorial content
Mobile advertising has increasing capacity for growth

11. Industry Considerations
$3.3 $4.6 $5.8
$7.9
$10.0
$11.5 $10.9 $12.1
$14.9
$17.0
$4.0
$5.0
$6.8
$9.0
$11.2
$11.9 $11.8
$13.9
$16.8
$19.5
$0
$5
$10
$15
$20
$25
$30
$35
$40
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Inbillions
Last 6 months First 6 months
Online Advertising Historical Revenue Mix
Source: IAB Internet Advertising Revenue Report, 2012 full Year Results, April 2013

12. Industry Considerations
0%
10%
20%
30%
40%
50%
Search Display
Banners
Classifieds Mobile Digital Video Lead
Generation
Rich Media
2006 2007 2008 2009 2010 2011 2012
Source: IAB Internet Advertising Revenue Report, 2012 full Year Results, April 2013
The surge in Mobile growth can be attributed to:
Growth in device penetration (Smartphone and
tablet), led by Apple and Google
Faster connection speeds as 4G / LTE adoption is
fueled by infrastructure and device upgrades
Improved screen resolutions that can squeeze more
ads onto the mobile screen
Increased sophistication in incorporating ads into
mobile apps and websites
Shifting social media consumption onto mobile
devices
Advertising Format Share, 2006-2012 (% of Total Revenue)

13. Key Financial Metrics
Historical Revenues and Net Income
Historical Earnings Per Share
Free Cash Flow
Historical Margins
-2,000,000
-1,000,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
2008 2009 2010 2011 2012 2013 2014
Free Cash Flow
Pro Forma FCF
Note: Free Cash Flow defined as Operating Cash Flow minus Capital Expenditures
0
1000
2000
3000
4000
5000
6000
7000
8000
2008 2009 2010 2011 2012
RevenueinMillions$
Net Income Revenue
0%
20%
40%
60%
80%
100%
2008 2009 2010 2011 2012
Gross Margin Profit Margin
0
1
2
3
4
2008 2009 2010 2011 2012
EPS
Expon. (EPS)

14. Competitors Comparable Analysis
Metrics YHOO AOL GOOG FB MSFT
Market Cap: 27.80B 2.82B 296.43B 90.57B 265.25B
Employees: 11,700 5,600 53,891 4,169 N/A
Qtrly Rev Growth (yoy): -0.07 0.02 0.31 0.53 0.1
Revenue (ttm): 4.91B 2.20B 53.50B 6.12B 77.85B
Gross Margin (ttm): 0.68 0.31 0.58 0.74 0.74
EBITDA (ttm): 1.33B 482.30M 16.81B 2.7B 30.52B
Operating Margin (ttm): 0.16 0.14 0.25 0.29 0.34
Net Income (ttm): 4.05B 1.05B 11.22B 554M 21.86B
EPS (ttm): 3.45 11.7 33.42 0.22 2.58
P/E (ttm): 7.45 3.12 26.73 173.4 12.34
PEG (5 yr expected): 1.32 1.57 1.29 1.68 1.32
P/S (ttm): 5.65 1.27 5.5 13.94 3.37
Corporate Credit Rating BBB- (as
of 2009)
BB+ AA NR AAA
Entreprise Value/Revenue 4.94 1.18 4.46 12.06 2.61
Entreprise Value/EBITDA 18.26 5.38 14.63 27.34 6.65

15. Simplified 2013 Income Statement
Projection

16. Key Take Away of the Comp Analysis
• Yahoo has very respectable multiples compared to
the industry’s main competitors
• EBITDA Valuation multiple is higher than competitor
other than Facebook
• EPS is relatively compared to other competitors.
• Low P/E and PEG ratio indicating that the company
might be undervalued
• Excellent gross margins ratio over the past 2 years

17. Corporate Credit Rating
• Yahoo has not been rated by one of the credit
rating agencies in the past 5 year
• Last time Yahoo was rated, they were at
assigned a BBB- (low compared to Google’s AA
and Microsoft’s AAA)
• There is evidence to believe that if rated today
Yahoo would be in the BBB+ and A+ credit
Rating

18. Why would Yahoo Be assigned an A
Corporate Credit Rating
Back in February 2008
• Market share, revenue and
income was shrinking.
• Yahoo had more than 800M
dollar in debt
• Yahoo was a potential target for
Microsoft
• Structure of the industry was
changing and Yahoo had missed
on many opportunities (cloud
computing for example)
• High period of instability in
management, S&P’s outlook on
the company was negative
• Stock price was declining
Now in August 2013
• Revenue and market share is
stable while net income has been
increasing
• Yahoo has close to no debt now
• Assets on BS worth over 17
billion dollars compared to 11
billion in 08
• Strategic partnership are helping
them jump on the next big thing
in the tech place: “Mobile”
• Marissa Mayer has been around
for more than a year and there is
much more stability in the
business. The outlook is positive
• Stock price is increasing

19. Take Away
• Based on those evidence, it is fair to say that
Yahoo’s debt would be assigned a high
grade/corporate credit rating.
• It’s also fair to say that investing in Yahoo
bond represents a safe/ low risk investment
since the likelihood of default is relatively low
• Finally this is an good reason why Yahoo
should focus on issuing this debt instead of an
equity raising

20. Key Income Statement Analysis
• Yahoo has done an excellent job reducing expenses,
effectively increasing net income by more than 50% in the
past three years
• All the income statement ratios indicate that the company is
doing well. Metrics such as EPS, gross margins and profit
margins have been increasing in the past five years
• It is important to note that the company has close to no
leverage.
• $0 of interest expense in the past five years.

21. 2.78 2.67 2.67 2.86
4.38
1
2
3
4
5
2008 2009 2010 2011 2012
Working Capital Ratio
21.68
19.55 18.87
17.88 17.47
10.00
12.00
14.00
16.00
18.00
20.00
22.00
24.00
2008 2009 2010 2011 2012
Debt-Equity Ratio (%)
82.19
83.65
84.12
84.84
85.13
82
82.5
83
83.5
84
84.5
85
85.5
2008 2009 2001 2011 2012
Solvency Ratio
• Increasing solvency
ratios indicates
Yahoo’s ability to meet
long-term debt
obligations
• Yahoo’s decreasing
debt-to-equity ratios
indicates business is
less risky as debt is
not heavily relied on
to finance operations
• Increasing working
capital ratios indicate
Yahoo is in a good
financial position to
meet short-term
obligations
Analysis of Key Balance Sheet Ratios
Working Capital Ratio Solvency RatioDebt-Equity Ratio (%)

22. Balance Sheet Ratio Comparison with Competitor
Analysis of Yahoo vs Google ROA
• Yahoo increasing ROA %
indicates increasing efficiency
in utilizing assets to generate
income
• 2012 ROA data shows Yahoo’s
ROA is 101.48% higher than
it’s main competitor Google
• Conclusion: Increasing trend
of Yahoo’s ROA indicates
profitability of company is
improving
3.06
4.00
8.25
7.09
23.07
13.31
16.10
14.70
13.42
11.45
0.00
5.00
10.00
15.00
20.00
25.00
2008 2009 2010 2011 2012
ROA using Net Income (%)
Yahoo
Google

23. Capital Structure
Financing Strategy:
• Since IPO in 1996, Yahoo has financed its operations through the issuance of equity every year
• From 2005 going forward, Yahoo has repurchased its common stock on a yearly basis, sometimes exceeding the issued
monetary amount; E.g In 2012 issued $218 million in common stock and repurchased $2.16 billion in common stock
• Yahoo’s Weight Average Cost of Capital is solely influenced by the expected return on its equity, which is computed through the
Capital Asset Pricing Model
0.9%
99.1%
Debt
Equity

24. Proposed Acquisition of BuzzFeed
• Mar 2013: BuzzFeed launched a
business section and hires editor-in-
charge of U.S. technology, media and
telecom coverage from Thomson
Reuters, Peter Lauria
• Similar advertising model, using
banner ads as source of revenue
• Target demographic consists of young
adults
• Facilitate Yahoo’s attempt to re-brand
as a trendier company by improving
connections with social media
platforms such as Facebook and
Twitter
Potential Synergies
Headquarters New York City
Founding Founded by Jonah Peretti in 2006
Customers >14 million monthly unique visitors
Geographic Mix Americas 95% Rest of World 5%
Product Overview Stories and news to be shared via
social networks
Slogan “The Viral Web in Real Time”
BuzzFeed Financials and Key Metrics

25. Acquisition Financing
• Finance acquisition of Buzzfeed through the issuance of interest-bearing bonds
-Pros
• Decrease Yahoo’s WACC
• Benefit from Tax Shield and lower tax bill
• Demonstrates management belief in growth
-Cons
• Will break industry norm through debt financing
• Cash will be tied up in interest payments
• Creditors will have a right to assets

26. Funding
Proposal

27. FCFF Valuation Model of Yahoo
2012 2013E 2014E 2015E 2016E 2017E
Revenue Growth 1.00 0.92 1.0317 1.04 1.05 1.06
Operating Margins 0.11 0.12 0.125 0.13 0.135 0.14
Revenues $4,986,566 $4,585,463 $5,142,198 $5,183,567 $5,233,409 $5,283,251
EBIT $566,368 $550,256 $642,775 $673,864 $706,510 $739,655
EBIT(1-t) $379,467 $368,671 $430,659 $451,489 $473,362 $495,569

28. Bond Market Overview
Ten Yr Treasury
US Corporate Bonds

29. Meet the Team:
SEO-U: Investment Banking Consultants
Group 2

30. JP Morgan Investment Bank
“Our aim is to be the world’s most trusted and
respected financial services institution”
-Jamie Dimon, Chairman and CEO
“Number One Global Investment Bank and Number One in
Debt Issuance in North America”
-Global Finance, Top Investment Banks 2013

31. JP Morgan Investment Bank
• Serving corporate, institutional and
government clients, J.P. Morgan’s
presence in the global credit markets is
unmatched. The firm combines superior
debt origination and structuring
expertise with exceptional distribution
capabilities to a large base of investors.
• The origination team works directly
with issuers, including
corporations, banks and sovereign
governments that seek funding.
J.P. Morgan advises these clients on
debt financing strategies, from a simple
bank loan to multi-billion-dollar capital
raising across asset classes. Colleagues
partner across borders to deliver
successful structuring, marketing and
pricing. The business then distributes
that product to investor clients.
Syndicated and Leveraged
Finance
• J.P. Morgan provides leveraged
financing to companies to help them
achieve objectives such as making an
acquisition, effecting a buy-
out, repurchasing shares or funding a
one-time dividend or investment.
J.P. Morgan arranges leveraged
loans, high-yield or junk bonds and
mezzanine debt for clients