Ly Corporation · TSE:4689
Ly — Yahoo Japan — FY2012 3Q Earnings Presentation
79 slides from Ly's earnings presentation, Jan 29, 2013
Slide 1: FY2012 3Q Business Results
Yahoo Japan Corporation FY2012 3Q Business Results (October-December 2012) January 29, 2013
Slide 2: Table of Contents
Table of Contents P. 3 Financial Highlights P. 21 Growth Strategies and Progress P. 61 Appendix Statements made at the meeting or included in the documents that are not historical facts are forward-looking statements about the future performance of Yahoo Japan Corporation and its consolidated subsid
Slide 3: FY2012-3Q Financial Highlights
FY2012-3Q Financial Highlights Achieved Double-digit YoY Growth for the First Time in 4.5 Years (¥100M) YoY Change 2011-3Q 2012-3Q Change Contributors ・Promotion (Listing) advertising revenue grew ・Yahoo! Premium membership revenue Revenue 765 886 15.8% increased by raising fees ・ValueCommerce becam
Slide 4: Quarterly Revenue
Quarterly Revenue (¥ 100M) 886 800 600 400 Gross Net 200 0 ‘02/ ‘03/ ‘04/ ‘05/ ‘06/ ‘07/ ‘08/ ‘09/ ‘10/ ‘11/ ‘12/ 10-12 10-12 10-12 10-12 10-12 10-12 10-12 10-12 10-12 10-12 10-12 *Commencing with FY2008, we started indicating revenue on a net rather than gross basis, by eliminating certain items in
Slide 5: Quarterly Revenue YoY Growth Trend
Quarterly Revenue YoY Growth Trend 15.8% 16% 12% 8% 4% 0% ‘09/ ‘10/ ‘11/ ‘12/ 10-12 10-12 10-12 10-12 5
Slide 6: Quarterly Revenue Breakdown
Quarterly Revenue Breakdown (¥ 100M) 886 Total +120 (¥100M) 765 +15.8% 800 Marketing Solutions Business 598 +21.0% 600 Promotion advertising revenue was strong 494 Consumer Business +9.1% 400 Yahoo! Premium membership revenue grew by raising fees 200 283 Other Business +17.3% 260 Improvement in cred
Slide 7: Quarterly Advertising-related Revenue
Quarterly Advertising-related Revenue (¥ 100M) 500 479 Total +63 (¥100M) 400 416 +15.2% Promotion advertising revenue 300 346 +24.0% -Smartphone advertising revenue rose 279 substantially 200 Premium (Display) advertising revenue -2.8% 100 -Revenue from premium advertising for 136 132 smartphones gr
Slide 8: Quarterly Advertising-related Revenue via Mobile Phones
Quarterly Advertising-related Revenue via Mobile Phones (¥ 100M) 60 Smartphone advertising revenue 50 +43 (¥100M) 40 Smartphone advertising revenue ratio 30 63 4.6% 13.2% *Smartphone advertising revenues includes some revenues via tablet devices. 20 Feature phone advertising revenue 10 19 -8 (¥100
Slide 9: Quarterly Advertising-related Revenue YoY Growth Trend
Quarterly Advertising-related Revenue YoY Growth Trend 25% 24.0% 20% 15% Promoting 10% Advertising Premium 5% Advertising 0% -2.8% -5% ‘09/10-12 ‘10/10-12 ‘11/10-12 ‘12/10-12 9
Slide 10: YoY Change Contributors by Industry - Promotion Advertising Revenue
YoY Change Contributors by Industry - Promotion Advertising Revenue (¥ 100M) +66.9 Total +66.9 (¥100M) +24.0% +30.7 +10.0 +8.6 +5.1 +4.9 +4.8 +4.2 0 YoY Change Others, net 10 *The sum of changes by industry doesn’t match the total YOY change because a portion of revenues is not categorized by indust
Slide 11: YoY Change Contributors by Industry - Premium Advertising Revenue
YoY Change Contributors by Industry - Premium Advertising Revenue (¥ 100M) Total -3.8 (¥100M) -2.8% +3.0 YoY +2.6 +2.1 Change Others, net 0 -2.3 -2.1 -3.8 -3.4 -3.7 11
Slide 12: Quarterly e-commerce Transaction Value
Quarterly e-commerce Transaction Value (¥ 100M) 4,237 4,305 Total +67(¥100M) 4,000 830 838 +1.6% Shopping-related +0.9% 3,000 Increase in transaction value of travel 1,826 1,823 Yahoo! Auctions -0.1% Transaction value was almost flat 2,000 Others +4.0% (Settlement/Financial services, pay digital con
Slide 13: Quarterly Profits
Quarterly Profits (¥ 100M) 600 60% 500 50% 400 40% 営業利益 Operating Income 経常利益 Ordinary Income 300 30% 四半期純利益 Quarterly Net Income 売上高営業利益率 Operating Margin 売上高経常利益率 Ordinary Margin 200 20% 100 10% 0 0% ‘02/ ‘04/ ‘06/ ‘08/ ‘10/ ‘12/ 10-12 10-12 10-12 10-12 10-12 10-12 *Margins for ’08/10-12 onward ar
Slide 14: Quarterly Operating Income YoY Growth Trend
Quarterly Operating Income YoY Growth Trend 19.5% 20% 営業利益成長率 16% 12% 8% 4% 0% ‘09/ ‘10/ ‘11/ ‘12/ 10-12 10-12 10-12 10-12 14
Slide 15: Revision of FY2012 Full Year Business Outlook
Revision of FY2012 Full Year Business Outlook (¥100M) FY2012 Forecast FY2012 Forecast (As of Oct. 24, 2012) (Revised) Reason for Revision ・Promotion advertising revenue grew favorably Revenue 3,190 - 3,253 3,322 - 3,382 ・ValueCommerce and others became subsidiaries Operating Income 1,733 - 1,770 1,7
Slide 16: Revised FY2012 Full Year Business Outlook Compared with Prior Fiscal Year
Revised FY2012 Full Year Business Outlook Compared with Prior Fiscal Year (¥100M) FY2011 FY2012 Change (Actual) (Forecast) Contributors ・Promotion advertising revenue expected to grow ・Yahoo! Premium membership revenue Revenue 3,020 3,322 - 3,382 increased ・ValueCommerce and others became subsidiari
Slide 17: FY2012-4Q Business Outlook
FY2012-4Q Business Outlook (For reference) (¥100M) 2011-4Q 2012-3Q 2012-4Q YoY Change (Actual) (Actual) (Forecast) Contributors ・Adv ertising rev enue expected to grow ・Rev enue f rom membership serv ices expected to Revenue 799 886 871 - 932 increase ・ValueCommerce and others became subsidiaries Op
Slide 18: Forecast of Cash Dividend for FY2012
Forecast of Cash Dividend for FY2012 (Revised) Cash dividends per share (¥) ¥382- 400 Cash dividend ¥387 per share is expected to grow 10.1-11.5% YoY 350 ¥347 ¥318 The Company’s target continues to be approximately 20% of consolidated 300 net income as its forecast for dividends for FY2012. 250 200
Slide 19: Issuance of Stock Options Exercisable when Profit Target is Reached
Issuance of Stock Options Exercisable when Profit Target is Reached Issued stock options to senior management. Doubling the operating income by March 201x is the basic condition to exercise the options. (Options equivalent to 271,700 shares issued) Aim to encourage senior management to commit and to
Slide 20: Share Buy Back
Share Buy Back Total Amount of JPY 20 billion (Maximum) Acquisition Number of Shares to be 800 thousand (Maximum) Acquired Market purchase through trust Method of Acquisition banking company Purchase Period Feb.1-Mar.15, 2013 All the shares purchased will be cancelled. 20
Slide 21: Aim to Achieve Double-Digit YoY Growth in Operating Income
Aim to Achieve Double-Digit YoY Growth in Operating Income -->Double Operating Income by FY ending 201X.3 X2 ¥165 billion 2012.3 201X.3 21
Slide 22: Growth Drivers in Short Term
Growth Drivers in Short Term 1 Paid search advertising “Sponsored Search” 2 Interest-based advertising “Yahoo! JAPAN Display Ad Network” 3 Yahoo! Premium membership fee 22
Slide 23: Measures to Re-accelerate Profit Growth
Measures to Re-accelerate Profit Growth Only 1 Strategy Aiming to become a portal site for “Only 1” services by brushing-up/ restructuring of own services and making alliances with external partners The Most Powerful Tag Teams Seeking to strengthen services provision through collaborations with
Slide 24: Only 1 Strategy
Only 1 Strategy
Slide 25: Top 20 Services DUB Trend
* Top 20 Services DUB Trend ‘10/10-12 ‘11/10-12 ‘12/10-12 Source：Yahoo Japan Corporation *DUB=Daily Unique Browsers 25
Slide 26: Measures Taken for Top 20 Services
Measures Taken for Top 20 Services 26
Slide 27: Measures Taken for Advertising Business
Measures Taken for Advertising Business Product category names changed Listing Advertising Promotion (Paid search advertising and interest-based advertising) Advertising Display Advertising (CPM-based banners, etc.) Premium Advertising 27
Slide 28: Promotion Advertising: New Product
Promotion Advertising: New Product Interest-based advertising “Interest Match” “Yahoo! JAPAN Display Ad Network (YDN)” 【Previously】 IM 【New】 YDN CPC-based Only CPC＋CPM-based Mainly on PC On PC＋Smartphone Text Advertising Text＋Image and Video 28
Slide 29: Premium Advertising: Survey Results on Effectiveness of Rich Ad
Premium Advertising: Survey Results on Effectiveness of “Rich Ad” ・ “Mouse Over Expand” Recognition Rate: approx.1.3 times Derivation Rate: approx. 1.6-2.1 times Expanding Rate: approx. 12-13% ・ “Top Impact” Recognition Rate: approx. 2 times Derivation Rate: approx. 7 times Started Ad Placement in J
Slide 30: Explosive Bargain Day
“Explosive Bargain Day” Promoted on Yahoo! JAPAN Top Page We will carry out the same event periodically. 30
Slide 31: Yahoo! Auctions and Yahoo! Shopping
“Yahoo! Auctions” ・ Monthly transaction value in Dec. 2012 grew favorably, up 4.7% YoY. ・ Number of new users increased sharply because of the improvement in registration process and the “Anyone can make a bid” campaign. “Yahoo! Shopping” ・ Quarterly transaction value reached a record high. ・ Number
Slide 32: FUKUOKA YAFUOKU! DOME
Conversion of name for Fukuoka Yahoo! JAPAN Dome to “FUKUOKA YAFUOKU! DOME” from Feb. 1st Promote Yahoo! Auctions collaborating with Fukuoka & Kyushu regional community and SOFTBANK Hawks fans, encouraging people to use the service Let everybody share joy of re-use via 32 Yahoo! Auctions
Slide 33: Qlear Career Change Started
New Recruiting Service “Qlear Career Change” Started ・ Interactive & communicative career opportunity service ・ Based on success-fee system, we offer low-cost & low-risk recruiting opportunities to companies. Obtain right information Make a decision Career change 33 without fail
Slide 34: Alliances at Ultimate Speed
Alliances at Ultimate Speed 34
Slide 35: Acquired 100% of CyberAgent FX
・ Acquired 100% of CyberAgent FX and started operating financial services. Taking advantage of their high-quality smartphone tools, we will seek to make the FX business a new revenue source. ・ Synergies with existing businesses Promote FX services to Yahoo! JAPAN users, especially Yahoo! Premium mem
Slide 36: Open Partnership in Smartphone Gaming Area
Open Partnership in Smartphone Gaming Area Gaming Service Providers (Plural Companies) Offer game entertainment services to smartphone users 36
Slide 37: Alliance with GREE, Inc.
Alliance with GREE, Inc. st 1 partner in smartphone gaming area Launched tie-up in gaming services on Nov. 8th, 2012. 37
Slide 38: Initiatives in Alliance with GREE, Inc.
Initiatives in Alliance with GREE, Inc. -Unparalleled media power -A wide variety of entertainment content -Yahoo! JAPAN ID -Established know-how in planning/ -Yahoo! Wallet development/operations -Yahoo! Points, etc. Aim at creating new entertainment values to offer users through Internet Discussin
Slide 39: Strengthened the Alliance with DeNA Co., Ltd.
Strengthened the Alliance with DeNA Co., Ltd. Our existing partnership in PC areas to be extended into smartphone areas 39
Slide 40: Initiatives in Alliance with DeNA Co., Ltd.
Initiatives in Alliance with DeNA Co., Ltd. User Account Number exceeded 10 million Discussing co-development of social games for PC to strengthen PC gaming service 40
Slide 41: Introducing mediamind's technology
・ Improve the advertising appeal power of premium advertising by introducing mediamind’s technology. Test result shows that users are engaged with rich advertising for a longer time compared * with normal advertisings. * Time during which users interact with the advertising, such as placing the mous
Slide 42: Test Result of Rich Advertising: Time users are engaged
Test Result of Rich Advertising: Time users are engaged. 1 2.2times Normal banner of パイロットビジョン Rich リッチ広告 Advertising Pilot Vision Pilot Vision / 42 Pilot Vision / Rich Gate Rich Gate Expand
Slide 43: Carview: Aim to offer Smart Car Life services
・ Made Carview a subsidiary. Aim to offer “Smart Car Life” services. （10 thousand UU） 543 No.1 in 400 Number of Users 347 200 132 88 77 0 Carview + Yahoo! Autos Goo-net carsensor.net Response. Autoc one Source: Nielsen (NetView JP), access from home and office using PCs (excluding Internet 43 applic
Slide 44: The Most Powerful Tag Teams
The Most Powerful Tag Teams
Slide 45: Strong Tag Team with SOFTBANK Group
Strong Tag Team with SOFTBANK Group No.1 Smartphone No.1 Internet Distributor Services Company 45
Slide 46: Yahoo! Premium Membership Acquisition at SoftBank Cell-phone Stores
Yahoo! Premium Membership Acquisition at SoftBank Cell-phone Stores Subscribers increased drastically in 3 months due to collaboration with Softbank Mobile Subscriber numbers jumped along with the commencement of sales of iPhone5 (Sept. 21). Number of new subscribers is up more than four times Avera
Slide 47: Trend in the Number of Premium Members
Trend in the Number of Premium Members （10 thousand） 872 850 800 750 700 650 0 600 ‘09/12 ‘10/12 ‘11/12 ‘12/12 47
Slide 48: Effective Customer-Leads Platform
Effective Customer-Leads Platform ・ A mass online-to-offline marketing (O2O) drive Special promotion offered on Yahoo! JAPAN site will lead users to advertisers’ shops and stores on the street. ・ SOFTBANK TELECOM started marketing in October. A mass promotion on Apply, win, Obtain ticket Obtain prod
Slide 49: Effective Customer-Leads Platform - Execution Example
Effective Customer-Leads Platform - Execution Example Free sample Suntory Coffee Boss “Give Taiyo-no-Mate-cha” Trial Campaign in Spicy and pure taste Kyushu Area Drink Mate-cha after eating Sukiyaki! Discount Coupon “Only for people who saw this “Kao Flair Fragrance Mist 3 types” banner” Taking away
Slide 50: Strong Tag Team with ASKUL
Strong Tag Team with ASKUL No.1 Office Supply * No.1 Internet Delivery Service Services Company *Transaction value of Office Supply by Mail Order, July 2011, Yano Research Institute Ltd. 50
Slide 51: LOHACO PC Site Started on Nov. 15th
“LOHACO” PC Site Started on Nov. 15th 51 Placed links on Yahoo! JAPAN top page
Slide 52: Strong Tag Team with LAWSON
Strong Tag Team with LAWSON ⇒ Established a joint venture, 52 Smart Kitchen, Inc.
Slide 53: Smart Kitchen
Smart Kitchen Delivery of Food (Refrigerated & Frozen) and Commodities - 23 thousand items including original products (One of the largest selection of items in Japanese delivery industry) - Effortless & convenient shopping via smartphones and tablets Start periodic delivery from Feb. 1st 53
Slide 54: Progress with Smartphone Growth Initiatives
Progress with Smartphone Growth Initiatives 54
Slide 55: Smartphones DUB Trend
Smartphones DUB Trend （Million UBs） 20 15 10 5 0 2011.4 2012.12 Source: Yahoo Japan Corporation *DUB=Daily Unique Browsers 55 * Data for April 2012 and after is retroactively adjusted for a change in the tally system.
Slide 56: Cumulative Number of Yahoo! JAPAN Applications Downloaded
Cumulative Number of Yahoo! JAPAN Applications Downloaded More than 65 iOS+Android million Cumulative downloads: Approx. 65 million and up More than 40 million 30 million Applicationsfor Applications foriOS・Android iOS・Android ‘12/4-6 ‘12/7-9 ‘12/10-12 56
Slide 57: DECOPIC Achieved a Total of Million Downloads
“DECOPIC” Achieved a Total of 12 million Downloads A photo application for ladies presented by Community Factory Inc. 57
Slide 58: Alliance with KAKAO JAPAN
58 Alliance with KAKAO JAPAN 5A MBE RAC as \ (2) BABTUSLSEHS PS
Slide 59: Initiatives in Alliance with KAKAO TALK
Initiatives in Alliance with KAKAO TALK Nov. 15 Introduced function that enables simultaneous conversation between a maximum of 5 people Nov. 20 Launched Kakao Game Dec. 13 Started broadcasting TVCM Dec. 24 Began KAKAO Lottery Campaign (to Jan. 6) Dec. 27 Released Talk Plus 59
Slide 60: Growth Strategies and Progress - Summary
Growth Strategies and Progress - Summary The Most Smartphone Unexplored Only 1 Strategy Powerful Tag Growth Teams Frontier Initiatives Advertising (O2O promotion Rich Ad services) YJ Capital Auctions e-commerce/ Project DEJIMA Membership Premium services Bharti Group (India) Others 60
Slide 61: Supplemental Information
Supplemental Information 61
Slide 62: Table of Contents
Table of Contents P. 63 Quarterly Business Results P. 74 Quarterly Business Data P. 76 Organization, Personnel and Affiliated Companies 62
Slide 63: FY2012-3Q Statements of Income
FY2012-3Q Statements of Income 2011-3Q 2012-3Q Change Revenue (¥100M) 765 886 15.8 % Cost of Sales (¥100M) 71 91 28.4 % Gross Profit (¥100M) 693 794 14.5 % SG&A (¥100M) 275 294 6.9 % Operating Income (¥100M) 418 499 19.5 % Ordinary Income (¥100M) 423 500 18.1 % Quarterly Net Income (¥100M) 253 309 2
Slide 64: FY2012-3Q Performance Breakdown by Business Segment
FY2012-3Q Performance Breakdown by Business Segment (¥ 100M) Cost of Operating Ordinary Operating Ordinary Revenue Revenue Breakdown SG&A Sales Income Income Margin Margin Advertising-related 468 Marketing Corporate services, etc. 86 Solutions 598 Information listing 37 100 165 332 334 55.5% 55.9% B
Slide 65: Business Segment Breakdown
Business Segment Breakdown Marketing Solutions Business ・Advertising-related: Promotion (Listing) advertising (paid search advertising, interest-based advertising) Premium (Display) advertising (banner, text, e-mail, and video) ・Corporate Services and Others: Data Center-related, Affiliate-related,
Slide 66: Quarterly SG&A Breakdown
Quarterly SG&A Breakdown (¥ 100M) Major Factors for YoY Changes Composition QoQ YoY Number of employees reached 11/3Q 12/2Q 12/3Q Ratio Change Change 5,744, up 695 persons (13.8%) Personnel Expenses 82 89 95 32.4% 6.9% 16.3% Decrease because of Business Commissions 37 33 35 12.1% 6.2% -4.2% more eff
Slide 67: FY2012-3Q Balance Sheets
FY2012-3Q Balance Sheets Increase/ Major Factors for (¥ 100M) Major Items 2011/12/31 2012/12/31 Decrease Increase/Decrease ＜Assets＞ Current Assets 2,914 4,720 1,805 Increase in cash from operating activities Cash and Cash Equivalents 2,162 2,682 519 Increase due to receivables on sale of Notes and A
Slide 68: FY2012-3Q Cash Flow Statements
FY2012-3Q Cash Flow Statements FY2012-3Q Major Items (Oct.-Dec. 2012) Major Factors for Changes Major Items (¥ 100M) Operating Activities 141 Quarterly Net Income before Income Taxes 507 Increase in quarterly net income before income taxes Depreciation Expenses 30 Accounts Receivable and Payable -Tr
Slide 69: FY2012-3Q Highlights – Marketing Solutions Business (1)
FY2012-3Q Highlights – Marketing Solutions Business (1) ■ Promotion advertising (Paid search advertising [Sponsored Search] and interest-based advertising [Interest Match] ) - Both paid search and interest-based advertising posted record highs revenue due to enhanced marketing activities based on ex
Slide 70: FY2012-3Q Highlights – Marketing Solutions Business (2)
FY2012-3Q Highlights – Marketing Solutions Business (2) ■ Premium advertising - Prime Display advertising revenue increased compared with the same quarter last year. Smartphone advertising revenue also grew significantly year on year. ■ Corporate services-related revenue - IDC Frontier Inc.’s cloud
Slide 71: FY2012-3Q Highlights – Consumer Business
FY2012-3Q Highlights – Consumer Business ■ e-commerce-related revenue (Yahoo! Auctions, Yahoo! Shopping, pay digital content and others) - The smartphone transaction value for Yahoo! Auctions surged compared with the third quarter last year. However, the overall transaction value of Yahoo! Auctions
Slide 72: Promotion Advertising Revenue by Industry
Promotion Advertising Revenue by Industry Industries with large year-on-year increase Transportation/Leisure Finance/Insurance/Securities Real Estate/Housing/Household Equipment 11/3Q 4Q 12/1Q 2Q 3Q Finance/Insurance/Securities 10.2% 9.9% 9.9% 9.9% 10.7% Transportation/Leisure 7.4% 8.7% 9.3% 1
Slide 73: Premium Advertising Revenue by Industry
Premium Advertising Revenue by Industry Industries with large year-on-year increase Industries with large year-on-year decrease Government/Organizations Cosmetics/Toiletries Foodstuffs Finance/Insurance/Securities Transportation/Leisure Beverages/Cigarettes 11/3Q 4Q 12/1Q 2Q 3Q Finance/I
Slide 74: Quarterly Business Data (1)
Quarterly Business Data (1) Indicator (Quarterly average) 2011/3Q 2012/3Q Number of total monthly page views (millions)(1)* 49,663 51,007 Number of total monthly smartphone page views (millions) (1)(2)* 4,256 9,935 Number of Daily UBs (Unique Browsers)(millions)(3) 50.29 54.16 Number of smartphone D
Slide 75: Quarterly Business Data (2)
Quarterly Business Data (2) Indicator (Quarterly total) 2011/3Q 2012/3Q Transaction value of Yahoo! Auctions (100 millions of yen) 1,826 1,823 Transaction value of shopping-related (100 millions of yen)(1) 830 838 Transaction value of Yahoo! Auctions and shopping-related (100 millions of yen)(1) 2,6
Slide 76: Organization Chart of Yahoo Japan Corporation
As of January 1, 2013 Organization Chart of Yahoo Japan Corporation Board of Auditors Board of Directors President & CEO CMO CSO( * ) CSO(**) CCO Executive Vice President & COO CFO Media Services Marketing Consumer System Solutions Business Central Services CFO Office Company (853) Company (363) Man
Slide 77: Number of Directors and Employees
Number of Directors and Employees (Number of People) (at the End of Quarter) 6,000 5,000 4,000 3,000 2,000 1,000 0 09/12 10/3 10/6 10/9 10/12 11/3 11/6 11/9 11/12 12/3 12/6 12/9 12/12 Directors and Auditors of 30 30 24 24 17 17 18 18 18 18 14 20 31 Subsidiaries Employees of 1,249 1,238 1,238 1,177 1
Slide 78: Consolidated Subsidiaries and Companies Accounted for by the Equity Method
Consolidated Subsidiaries and Companies Accounted for by the Equity Method (as of December 31, 2012) •Major consolidated subsidiaries at the end of FY2012-3Q Carview Corporation Community Factory Inc. Crocos, Inc. Daini Corp. Feedpath, Inc. Firstserver, Inc. GyaO CORPORATION IDC Fron
Slide 79: Yahoo Japan Group IR information
Yahoo Japan Group IR information is available at : http://ir.yahoo.co.jp/en/ 79