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Yang Zhiyuan holds telephone conference to explain Yahoo and reason of cereal song collaboration

June 13, 2008

Beijing time on June 13 message, according to foreign media coverage, on the telephone conference that in Yahoo Zhou Siju goes, yang Zhiyuan of this company presiding apparitor and Er of gram of president susan heart (Susan Decker) explained why Yahoo wants respectively with Google(Gu Ge) the reason that reachs cooperative agreement.

Yahoo week 4 announce, already stopped with all negotiations between Microsoft, signed to be not exclusive sex to search advertisement cooperation agreement with Google. Consultative provision, yahoo will be in advocate the search of station and United States and Canadian collaboration website puts Google on advertisement in the result, yahoo has authority to decide Google advertising is specific put in the position and means. Yang Zhiyuan predicts, this trades can bring for its annual the battalion of 800 million dollar closes.

　　 It is Yang Zhiyuan and Debs below make a speech and accept a query on conference of Zhou Si telephone entire content:

　　 Speech phase:

Yang Zhiyuan: The negotiation of we and Microsoft has ended. Before this, we and Microsoft held a talk several times. In the talk that held on June 8, yahoo president Luo Yibo Situoke (a few tall canals also participate in Roy Bostock) and Yahoo among them. These talks basically discussed to launch the possibility of all sorts of collaboration with Microsoft. Microsoft expresses clearly, to buying Yahoo asset disinclination completely. Microsoft puts forward to search business and Yahoo collaboration only, we feel to should suggest not to accord with the optimal interest of Yahoo partner.

With the cooperative agreement that Google reachs, do not prohibit we with its his tripartite orgnaization has similar collaboration. Already was the travel before Yahoo rises at present when. With Google collaboration can enhance the market competition ability of Yahoo. Our strategic goal is, seize the growth business chance of network advertisement market. The core of this strategy is to want a text to search advertisement and indication ad business to close 2 for one. And should achieve our goal, the most crucial factor is to should adopt open strategy.

To achieve our strategic goal, we already made a large number of significant step before this. After reaching cooperative agreement with Google, not only the market dimensions that is helpful for enlarging Yahoo, and the gain level that still will raise Yahoo.

We already reached commercial agreement with Google, yahoo will be in advocate the search of station and United States and Canadian collaboration website puts Google on advertisement in the result, the advertisement that at the same time we will still put him Yahoo on. Our Panama (platform of Panama) network advertisement will continue operation. Notable is, the dispute that we and Google sign is exclusive agreement, we still will reach similar agreement with any tripartite enterprises henceforth.

The period of efficacy of this agreement is we and Google 10 years. The first phase is 4 years, yahoo can choose to whether renew the contract with Google according to oneself circumstance, add fix a date is restricted to be 3 years, can renew the contract twice. In addition, this cooperative limits is confined to in the United States and Canadian market. In view of the United States judiciary may launch investigation to this, yahoo and Google agree consistently, extend time of consultative become effective backward 3 half moon.

We think, outside should trading to increase 250 million dollar to the operation cash reserve in a bank of 450 million dollar to flow except hopeful, still will bring income of 800 million dollar every year for Yahoo, the reason is the United States and market of Canadian network advertisement have tremendous growth potential. We already bought Right Media of network ad firm before this, will undertake upgrading to platform of advertisement of Yahoo oneself network at the same time. We answer a nature that regards strategy of ad of Yahoo oneself network as with Google collaboration is outspread. We think, open market is very main, as important as what Google cooperates even if Yahoo strides one pace.

Debs: The potential market that will bring to Yahoo to cooperating this rises, we feel extremely excited. Cooperate through this, will make Yahoo develops his market dominant position to acme, the full control that will make Yahoo realizes all to oneself business at the same time counterpoises.

This the main distinguishing feature of cooperative agreement is its flexibility. It also widened the diversity of our strategy program, namely we but more agile ground pays cost to search advertisement of advertisement and platform of Yahoo oneself Panama to have organic couple Google. We will put the place with profit highest potential on Google search advertisement, also be such to showing advertising puts in strategy. Come so, user experience will get be strengtheninged further.

Network ad business will pay fee to Google directly, google pays relevant fee to us according to hit circumstance again. To the network advertisement that Yahoo oneself puts in, ad business still pays fee to us directly. Yahoo is new-style AMP of indication advertisement platform will at be being rolled out formally next week. We had rolled out SearchMonkey, Yahoo to search product of etc of assistant, Buzz before this, these services gained market success. We still hold advantage position on algorithmic search.

Outside cooperating except network advertisement, this agreement still included Yahoo to be connected with the each other of instant communication interconnection between Google wait for matters concerned.

Yang Zhiyuan: Everybody mights as well want, through implementing afore-mentioned strategy, will bring enormous value to Yahoo partner undoubtedly.

　　 Query phase:

Ask: Will want to adopt platform of Google network advertisement only henceforth, network ad business can put in its advertisement between Yahoo page, so whether will they still be willing to continue to pay advertisement fee to Yahoo alone henceforth? It is Google puts in advertisement to Yahoo page at present, and on the contrary, will Yahoo also consider to put a few Yahoo on advertisement on Google page henceforth?

Debs: The situation that we already understood is, google has an advantage very much in domain of search ad business, but indication advertisement is not its grow. Look from gain method accordingly, we hope to be able to grow in oneself on continue to produce an advantage. Through cooperating with Google, we can be mixed in search advertisement at the same time two domains develop indication ad energetically business. Showing advertisement field of course, we provide a help possibly also henceforth to Google.

Ask: Between Yahoo search result, how much is you plan to put Google advertising on rate roughly?

Debs: This amount should be not little, its principle is the gain level that makes we continue to keep current (it is actually avoid to reply) to this query.

Ask: Does both sides obtain cost in TAC(discharge) differentiate how do going up discuss?

Debs: Should make its emulative very strong.

Ask: You feel to be able to appear this kind of circumstance: A few Yahoo have a partner to will convert Google. Will be you adopted for this why to plant persuade measure to stay?

Debs: Trade this to already considered the issue of Yahoo partner. This also is plan of a kind of option of course. But should trade not to involve the fresh blood that joins Yahoo publisher network. To assuring the capital provision of measure, I disclose in this inconvenience.

Ask: That that is to say, those fresh blood are business of additionally one batch of ad, right? Is the 800 million dollar that you say to point to increase income newly every year?

Debs: Yes, it is to show year increases income newly, this number is based on our current profit pattern to push numerate. Like coming to an agreement with Google like us, we also are willing with its his tripartite enterprise begins collaboration in indication advertisement domain. We think, through opening mode, not only will make we realize network advertising dimensions to influence growth, and advantageous to our client also.

Ask: What is the biggest obstacle that you feel to cooperate with Google?

Yang Zhiyuan: Because this is agreement of cooperation of a commerce merely, because this should be not put in the obstacle such as superintendency department approval. But we already agreed, american judiciary can have by a definite date to this 3 half-moon evaluate.

Ask: Will you cooperate from this in specific how many income to obtain to be divided into?

Yang Zhiyuan: Collaboration has not begun formally now, our inconvenience discusses this issue too much. We must use this collaboration opportunity, lay next more good market foundations for Yahoo. After beginning collaboration formally, we will gain more collaboration experience from which.

Debs: When thinking how to increase Yahoo cash to sort a problem, how do we raise Yahoo to search advertising gain level in thinking, in this respect we still lose quite, and the good qualities of Google also depends on this.

Telephone conference comes here end.

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