2002 Achievements & Milestones

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Identified New, High Growth Opportunities. In addition to enhancing existing businesses, we ventured into new areas in an effort to improve the quality of our revenue to be more predictable and sustainable over the long term. We made strategic decisions about whether we should buy, build or partner, and we leveraged our core assets, including our globally recognized brand, enormous user base, world-class technology and strong balance sheet. We identified high-growth opportunities that Yahoo! is well suited to take advantage of, such as HotJobs, premium services and access.

We closed our acquisition of HotJobs in February 2002, and concentrated on integrating HotJobs into the Yahoo! platform throughout the year. By combining the strengths of both Yahoo! and HotJobs, I believe we will become an extremely valuable source for employers, recruiters and job seekers in the online careers segment, which industry analysts believe is poised to grow substantially over the next several years. With HotJobs now fully integrated into our platform, we will be able to provide users with a deeper, richer level of personalization and give our clients powerful opportunities to target the largest share of active and passive job seekers on the Web. Given the current economic conditions, there has been erosion in the overall recruitment market; however, HotJobs revenue has been stable quarter to quarter, demonstrating that we are taking share from both our online and newspaper competitors. I believe we are in a strong position to benefit as soon as the job market bounces back.

With respect to premium services, I've already mentioned that we now have 2.2 million paying relationships. What's remarkable about that number is we began the year with just 375,000 paying relationships, demonstrating dramatic growth. We vaulted to the No. 2 position in online paid personals, took a leadership position with a variety of value-added mail services, expanded stalwarts like Fantasy Sports and introduced innovative services such as Games on Demand.

Along with our premium services initiatives, we successfully launched our access business, in partnership with SBC during the year. This relationship enabled Yahoo! to begin bundling services to provide a value proposition that would appeal more broadly to our users. The focal point of our partnership is SBC Yahoo! DSL, which allows us to create a new broadband environment and implement new levels of personalization. Of the 2.2 million paying relationships, approximately half represent subscribers that have purchased content and services bundled with access.