Ly Corporation · TSE:4689
Ly — Yahoo Japan — Q1 FY2008 Earnings Presentation
44 slides from Ly's earnings presentation, Jul 25, 2008
Slide 1: FY 2008-1Q Business Results
Yahoo Japan Corporation FY 2008-1Q Business Results (April-June 2008) July 25, 2008 1
Slide 2: Forward-looking statements and revenue presentation basis
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 subsidiaries and affiliates. The Company cautions you that a number of important factors could cause a
Slide 3: FY2008 1Q Highlights (1)
FY2008 1Q Highlights (1) (April 2008 – June 2008) In the first quarter, the revenue amounted to ¥65.5 billion.* Operating income was ¥32.8 billion, increasing 10.9% from a year earlier. Ordinary income totaled ¥32.4 billion, rising 13.6% over the same period last year. Net income climbed to ¥19.1 bi
Slide 4: FY2008 1Q Highlights (2)
FY2008 1Q Highlights (2) (April 2008 – June 2008) In the advertising business, sales of behavioral targeting advertising that targets users according to their past history of Internet usage surged year on year. Sales of the business’s core product, Prime Display, also increased. Paid search advertis
Slide 5: FY2008 1Q Highlights (3)
FY2008 1Q Highlights (3) (April 2008 – June 2008) In the personal service business, Yahoo! Auctions’ revenues from system-use fees declined slightly despite the implementation of various measures to increase the number of auction items listed and higher levels of use by mobile phone users. Efforts b
Slide 6: FY2008-1Q Financial Results (Consolidated)
FY2008-1Q Financial Results (Consolidated) •Consolidated subsidiaries at the end of FY2008-1Q Firstserver, Inc. Indival, Inc. Netrust, Ltd. NewsWatch, Inc. Overture K.K. Tricle Inc. Yahoo Japan Value Insight Corporation Y’s Agencies Inc. Y’s Insurance Inc. Y’s Sports Inc. •Affili
Slide 7: FY2008-1Q Statements of Income
FY2008-1Q Statements of Income 08/4-6 08/4-6 07/4-6 Changes (Gross (Net basis) (Gross basis) (Gross basis) Comparison) Revenue (¥100M) 655 725 566 28 % Cost of Sales (¥100M) 69 107 24 346 % Gross Profit (¥100M) 586 617 542 14 % Operating Income (¥100M) 328 328 296 11 % Ordinary Income (¥100M) 324 32
Slide 8: Quarterly Revenue
Quarterly Revenue (¥ 100M) 600 400 200 0 4-6 05/4-6 7-9 10-12 06/1-3 4-6 7-9 10-12 07/1-3 4-6 7-9 10-12 08/1-3 388 411 466 470 492 512 545 575 566 610 700 742 655 725 8 • Figures on gross basis for 08/1Q are for your reference.
Slide 9: Quarterly Profits
Quarterly Profits (¥ 100M) 400 50% 40% 300 30% 200 20% 100 10% 0 0% 05/4-6 7-9 10-12 06/1-3 4-6 7-9 10-12 07/1-3 4-6 7-9 10-12 08/1-3 4-6 Operating Income 184 190 211 235 239 250 276 295 296 300 312 337 328 Ordinary Income 178 185 205 229 229 247 266 284 285 293 308 328 324 Operating Margin 47% 46%
Slide 10: FY2008-1Q Revenue Breakdown by Business
FY2008-1Q Revenue Breakdown by Business (Net basis) (¥ 100M) Sales Breakdown Gross Operating Operating Revenue SG&A by Business Unit Profit Income Margin Search Business & Overture K.K. Media Business Advertising Service Supervising Division Social Net Business Auction Business New Businesses Office
Slide 11: SG&A Breakdown
SG&A Breakdown (¥ 100M) Major factors for YoY changes 08/1Q 07/4Q 07/1Q Increase in personnel (4,164 at the (Net) (Gross) (Gross) end of 08/1Q: 745 increase from 07/1Q) Personnel expenses 61 23.9% 62 -1.5% 50 21.2% Expenses for temporary and Business commissions 42 16.7% 41 3.0% 37 14.7% contracted
Slide 12: FY2008-1Q Balance Sheets
FY2008-1Q Balance Sheets Increase/ Major Factors for Major Items 2008/6/30 2007/6/30 (¥ 100M) Decrease Increase/Decrease Assets Current Assets 1,148 934 214 Cash and Cash Equivalents Payment due to acquisition of own stocks 666 553 113 33.3 billion yen. Notes and Accounts 341 283 58 Receivable -Trad
Slide 13: FY2008-1Q Cash Flow Statements
FY2008-1Q Cash Flow Statements FY2008-1Q (¥ 100M) Major Items Major Factors for Changes (Apr.-June 2008) Operating Activities 54 Increase in quarterly net income before income taxes Net Income before Income Taxes 331 Depreciation Expenses 25 Decrease in Accounts Receivable/Payable- Trade 10 Payment
Slide 14: Number of Directors and Employees
Number of Directors and Employees (Number of People) (at the End of Quarter) 4,000 3,000 2,000 1,000 0 05/6 9 12 06/3 6 9 12 07/3 6 9 12 08/3 6 Directors and uditors of Subsidiaries 27 27 33 33 31 31 25 27 27 33 31 32 26 Employees of Subsidiaries 417 438 583 594 669 670 634 711 773 990 1,015 1,053 6
Slide 15: Review of FY2008 1Q Business Outlook
Review of FY2008 1Q Business Outlook With economic conditions more sluggish than forecast, sales of businesses such as display advertising, paid search advertising, recruiting were slow in FY 2008-1Q. In addition to variable costs being lower than projected, we curtailed communication expenses and e
Slide 16: FY2008-2Q Business Outlook
FY2008-2Q Business Outlook (Consolidated) Tough business conditions may continue for a while. Although the display advertising and recruiting businesses are facing challenging conditions for cyclical reasons, we will try to offset them with growth in paid-search advertising and Yahoo! Premium member
Slide 17: Yahoo! JAPAN vs. Google
Unauthorized use is not permitted Starting Interest Match™ Service Web search query market shares in Japan Yahoo! JAPAN has the largest share Source: Video Research Interactive, access from home, Web Report. May 2008 Websites analyzed :Yahoo!/Google/MSN/goo/Biglobe/ocn/nifty/excite/infoseek/au one/s
Slide 18: Starting Interest Match Service
Starting Interest Match™ Service Content-Linked Advertising Market in Japan - Still immature at this point, but anticipated to grow into a market of similar scale to the paid-search advertising market. The Group plans to begin offering Interest Match™, a content-linked advertising product with super
Slide 19: Commenced Spot & Search Service on a Trial Basis
Commenced Spot & Search Service on a Trial Basis We launched a test version of our new ad product “Spot & Search” (Offered to certain advertisers on a trial basis) Special features of Spot & Search service - When keywords shown in TV commercials are searched for on Yahoo! JAPAN, a video streaming ad
Slide 20: Measuring the Effect of Internet Advertising
Measuring the Effect of Internet Advertising Survey announced in April 2008 - In collaboration with Video Research Interactive Inc., NTT Resonant Inc., and Microsoft Corporation, the Group conducted a survey on branding impact in Internet advertising (Survey period: March to December 2007). Survey R
Slide 21: Yahoo! Everywhere Strategy
“Yahoo! Everywhere” Strategy Further expand services to mobile phones, TV sets, and other devices. Renewed Yahoo! Keitai top Started services for Began Internet service for page for Softbank mobile iPhones Sharp Corp.’s AQUOS services 21
Slide 22: Carbon Neutral Activities
Carbon Neutral Activities As part of the Group’s environmental protection activities, began carbon neutral activities. Offset for the Company’s energy consumption: - With its electric power consumption for fiscal 2007 as a target, the Company plans to acquire Green Electric Power Certification and t
Slide 23: Activities to improve customer support system
Activities to improve customer support system Establish a subsidiary specializing in customer support services - Revise the previous outsourcing system for customer support and establish an outsourcing system and an internal operations system that diversifies risk and makes highly effective use of e
Slide 24: Review of Operations
Review of Operations 24
Slide 25: Businesses of Yahoo! JAPAN
Businesses of Yahoo! JAPAN Internet advertising Advertising Display advertising such as banners Paid listing service offered by Overture K.K., a newly consolidated Business subsidiary on Sept. 2007, etc. Business services other than advertising Information listing fees for Yahoo! Rikunabi, Yah
Slide 26: Advertising Business
Advertising Business Display advertising (Banner advertising, etc.) Sales of behavioral targeting advertising, which targets users according to their past history of usage, rose sharply, especially to real estate and construction; finance, insurance, and securities; transportation and leisure; auto
Slide 27: Display Advertising Sales by Industry
Display Advertising Sales by Industry Industries with large year on year increase Industries with high year on year growth rate Real Estate/Construction Entertainment Related Software Autos (Transport Equipment) Transportation/Leisure Transportation/Leisure Real Estate/Construction 07/1Q
Slide 28: Business Services Business
Business Services Business E-commerce-related revenues (Auction Business, Shopping Business, etc.) At the end of June 2008, the number of merchant stores registered on Yahoo! Shopping and Yahoo! Auctions totaled 32,061 increasing by 3,693 stores, or 13.0% year on year. Commerce-related revenues als
Slide 29: Personal Services Business
Personal Services Business Yahoo! Auctions system-use revenues (Auction Business) Although there were signs of a slight recovery in the special items category, total commercial transaction volume of Yahoo! Auctions in the first quarter was approximately flat, at ¥184.6 billion. The Yahoo! Auctions
Slide 30: Review of Operations by Business Unit
Review of Operations by Business Unit 30
Slide 31: Review by Business Unit (1): Search, Auction
FY2008-1Q Review of Operations by Business Unit (1) Search Business Yahoo! Answers: Renewed detailed particulars of questions page, adding category types, topic keywords, and at-a-glance lists of questions being answered. Improved the interface of the mobile version of Yahoo! Answers. Yahoo! Sea
Slide 32: Review by Business Unit (2): Member Services, Media
FY2008-1Q Review of Operations by Business Unit (2) Member Services Business Ran various campaigns to acquire new subscribers, including free 2-month Yahoo! Premium membership for subscribing to Yahoo! BB, a ¥1,575 monthly discount for 22 months on the Yahoo! BB ADSL 8M service, and a promotion fo
Slide 33: Review by Business Unit (3): Lifestyle, Shopping
FY2008-1Q Review of Operations by Business Unit (3) Lifestyle Business Through a tie-up with TUGBOAT, started offering X Brand, an information service that combines and edits information from 20 high-quality magazines in the categories of fashion, gourmet, travel, beauty, and other lifestyle areas
Slide 34: Review by Business Unit (4): Regional Services, Social Net
FY2008-1Q Review of Operations by Business Unit (4) Regional Services Business Yahoo! Maps: Improved a peripheral search function and interface design, to get timely-updated maps and regional information easier and quicker. Yahoo! Gourmet: Added web pages for details of “word of mouth” postings
Slide 35: Review by Business Unit (5): New Businesses, Service Supervising
FY2008-1Q Review of Operations by Business Unit (5) New Businesses Office Settlement Services: Continued to aggressively acquire users of the Yahoo! JAPAN Card Suica. During the quarter, added ability to use Yahoo! Points for Suica charges and to mutually convert Yahoo Points and Suica Points. Inc
Slide 36: Appendix
Appendix 36
Slide 37: Organization
Organization Auditors Board of Directors President & CEO Director & COO Director & CFO COO Office CSO CCO CTO (1) Member Services Auction Search Administrative Office Business Business Business (116) (109) (153) (135) Information Security Office Shopping (77) Regional Services Media Legal Office Bus
Slide 38: Additional Business Data: 2008-1Q
Additional Business Data: 2008-1Q • Average Daily Transaction Volume Apr.-Jun. 2007 Apr.-Jun. 2008 Commerce ¥ 100M 25.3 26.1 Auction ¥ 100M 19.9 20.2 Shopping* ¥ 100M 5.4 5.8 Yahoo! Mobile e-commerce ¥ 100M 2.6 3.6 • Subscriber Lines for Yahoo! BB Services End of Jun. 2007 End of Jun. 2008 Total (th
Slide 39: Number of Yahoo! JAPAN Users
Number of Yahoo! JAPAN Users (Millions of browsers) (Millions of people) Unique Browsers 150 Unique Customers 100 50 0 06/6 9 12 07/3 6 9 12 08/3 6 (Source: Nielsen Online/The Group) • The Number of Yahoo! JAPAN Unique Browsers is the total number of unique browsers accessing our services. It can fl
Slide 40: Number of Yahoo! JAPAN IDs and Members
Number of Yahoo! JAPAN IDs and Members (Millions of IDs and lines) Number of Yahoo! JAPAN Active User IDs 20 15 Number of Yahoo! Premium 10 Member IDs 5 Number of Yahoo! BB Members 0 06/6 9 12 07/3 6 9 12 08/3 6 Active User IDs 16.24 17.05 18.28 19.23 19.67 20.31 21.36 21.92 22.02 Prem ium Mem ber I
Slide 41: Number of Yahoo! JAPAN Page Views and Time Spent
Number of Yahoo! JAPAN Page Views and Time Spent Average Daily Time Spent per User (Millions of PVs) Time spent (Seconds) Average Daily PVs 400 1,500 300 1,000 200 500 100 0 0 (Source: Nielsen Online/The Group) • Average Daily PVs are based on the Company’s data • Average Daily Time Spent per user i
Slide 42: FY2008-1Q Major Advertisers
FY2008-1Q Major Advertisers Finance/Insurance/Securities Beverages/Cigarettes Sumitomo Mitsui Banking Corporation Kirin Brewery Company The Bank of Tokyo-Mitsubishi UFJ, Ltd. Suntory Limited Orix Credit Corporation Coca-Cola (Japan) Company, Limited Autos (Transport Equipment) Fashion/Access
Slide 43: e-Commerce Transaction Volume and Number of Stores
e-Commerce Transaction Volume and Number of Stores (¥ 100M) (Stores) 3,000 Transaction Volume Total number of stores 30,000 2,000 20,000 Yahoo! Shopping stores Yahoo! Auctions stores 1,000 10,000 0 0 06/1Q 2Q 3Q 4Q 07/1Q 2Q 3Q 4Q 08/1Q • Transaction volume excludes the amount of fraudulent orders. 4
Slide 44: IR information
Yahoo Japan Corporation IR information is available at : http://ir.yahoo.co.jp/en/ 44