Yahoo Japan Corporation (



F4Q 2010 Earnings Conference Call

April 22, 2011 10:00 AM ET


Masahiro Inoue – President and CEO


Keiichi Yoneshima – Barclays Securities

Yosuke Tomimatsu – Merrill Lynch Securities

Takayoshi Koike – Goldman Sachs

Atsuo Takahashi – Mizuho Securities

Yuko Maruyama – Nomura Securities

Masato Araki – Mitsubishi UFJ Morgan Stanley


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Thank you very much for waiting. We would like to now start the Yahoo Japan Corporation Annual Results Meeting for FY 2010 Fourth Quarter and Full Year. You have a presentation material in front of you and the profit and loss statement summary and the questionnaire, the survey sheet, so please give us your feedback.

Mr. Inoue will spend little less than 30 minutes for the presentation using the presentation material and we would entertain questions after the presentation.

Masahiro Inoue

[Interpreted] Thank you very much. At this time, we are talking about the fourth as well as the full year and these are the financial data. Sales ¥292.4 billion, that is 4.5% increase year-on-year; operating income ¥159.6 billion, 11% increase year-on-year; ordinary income ¥160.2 billion, 11.8% increase; net income ¥92.1 billion, 10.4% increase, so all of those numbers increased year-on-year.

As an overall summary, as you see on this page, the FY 2009, after the collapse of the Lehman Brothers, we were impacted by the recession and advertising had been weak. But 2010, if you look at the full year, we started to see the quick recovery from the bottom.

And as you know, the research company was transferred, research business, to MACROMILL – transferred to MACROMILL, so now it’s under equity method. So, the sales, including that decrease, increased only by 4.5% but the profit or income increased more than 10%. So, for the 14th consecutive year, both sales and profit were record high.

I’d like to talk about the brief summary of each segment. The Media business, as I mentioned, advertising sales rose steadily. BS business, the listing advertising particularly for the small customers grew, and also in 2009 the recruitment information listing revenue was down but it has recovered. As for Consumer, the shopping related, also the digital content, especially games, steadily increased in revenue; however, auction is still a little weak.

The numbers, I think, are shown here and advertising was very strong and because of this Media business has increased (inaudible) more than 7%. What about fourth quarter? Again, the listing display increased mainly. Revenue, ¥75.7 billion; operating income, ¥42.3 billion; ordinary income, ¥42.7 billion; quarterly net income, ¥24.3 billion, so 3.5%, 9.5%, 10.4%, 4.3% increase respectively, and revenue profit hit a record high.

Looking at the Media business, in the fourth quarter, as I mentioned already, the advertising was strong. Also for the mobile phones, advertising has been increasing. On the 11th of March, there was a major earthquake and if you look at the fourth quarter results, we were impacted by it, and for each business segment, what kind of impact we had are summarized here.

In Media business, there were self-restraint that is the suspension of the advertising we also had that at Yahoo! and during that time the advertising revenue was down to zero because of the suspension of advertising. And also, the users’ activities have changed during this time, so the click on the advertising was reduced, and they just went directly to the information that they wanted to see. So that type of usage was more prevalent after the earthquake, so the click – the number of the clicks declined and the revenue from that was reduced.

Sales revenue was ¥30 billion, operating income ¥16.5 billion, each of those increased. So it was not bad, but without the earthquake, probably the fourth quarter was very strong quarter.

Looking at the display advertising, the suspension of the advertising was the major element. The smartphones has been increasing and the GyaO for the full-year, for the first time, generated profit. So, this was one of the reasons why display advertising increased. And the impact from the earthquake, as you see here, is same as I mentioned before.

As for BS business, listing advertising was impacted and data center related revenues. Now there is migration was shift to cloud, because of the business structural change is progressing, so the collocation business, renting the space, is lower in terms of the value-add. But in the case of the cloud-type services, there would be additional services that we can offer, so it is better in terms of the business structure. So that kind of business is expanding.

As for the real estate and also the recruitment information, we saw recovery and impact from the earthquake for this business from the small medium-sized businesses we receive revenue that is a part of this BS business. So the earthquake-hit areas, we have some customers in those areas and sometimes, we were not sure whether we could provide services, or we stop the charges to those some of the customers and some other majors, so those affected, or influenced, some of the revenue numbers.

But in the case of data center related revenues, especially after the earthquake, outside of Kanto area, there has been a lot of inquires about the data center outside of Kanto area. But as for the fourth quarter, this has not yet turned into the sales, but we expect that this would happen in the future. So sales revenue, ¥19.9 billion; operating income, ¥10.6 billion, and 6.7%, 16.2% increase year-on-year.

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