Yahoo! Inc.

Alibaba Group Transaction Presentation 5.21.2012

Forward-Looking Statements
This presentation contains forward-looking statements concerning the agreement entered into by Yahoo! with Alibaba Group Holding Limited, including, without limitation, statements about the expected timing of closing of the transactions contemplated by the agreement, the ability of Yahoo! to monetize its holdings in Alibaba in both the near-term and in the future, potential future actions by Yahoo! and Alibaba concerning future business initiatives between Yahoo! and Alibaba and the potential for an initial public offering of Alibaba shares, and other expected benefits of the agreement and related agreements. Risks and uncertainties may cause the actual results and benefits of the transactions contemplated by the agreement and related agreements to differ materially from management expectations. The potential risks and uncertainties include, among others, the failure to consummate or delays in consummating the transactions contemplated by the agreement; uncertainty regarding the future valuation of Alibaba; uncertainty regarding the financing of the transactions; uncertainty regarding if and when there will be an initial public offering of Alibaba shares; uncertainty regarding any future business initiatives with Alibaba; general economic and market conditions; and the possibility that some or all of the expected benefits of the agreement and related agreements may not be realized. All information set forth in this presentation is as of May 20, 2012. Yahoo! does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances. More information about potential factors that could affect Yahoo!s business and financial results is included under the captions Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations in Yahoo!s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as amended, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, which are on file with the Securities and Exchange Commission (SEC) and available at the SECs website at www.sec.gov. Yahoo! and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.

Transaction Rationale Balance of Near Term Liquidity with Future Growth

Paves the way for an IPO of Alibaba Group Partial monetization in near-term at attractive valuation and terms Tremendous return on investment prudent to take some chips off the table Ability to participate in future upside and monetize at least half of stake at public market value Straightforward transaction means quicker time and greater certainty to close Aligns interests between Alibaba Group and Yahoo!... a stronger relationship going forward Opportunity to return a substantial amount of cash to shareholders

Agreement Overview A Staged Exit

Staged exit is best option for shareholders given large size of stake
2012 (~ 6 months) Alibaba Group IPO Post Alibaba Group IPO

Sale of up to 50% of Yahoo!s stake to Alibaba Group (~20% of Alibaba)

Agreement to sell 25% of Yahoo!s current stake at the IPO price at the time of IPO (~10% of Alibaba)

Future sales at Yahoo!s discretion with Alibaba Group marketing support

Initial Sale Overview

Size Alibaba Group will repurchase up to 50% of Yahoo!s Alibaba Group stake upon closing later this year (~20% of Alibaba Group) Price set by market price of an Alibaba Group third-party equity raise to fund the transaction Minimum value equivalent to $35 billion equity value same value as recent third-party tender offer for employee-owned shares Alibaba Group is incentivized to drive higher valuation Price Protection Alibaba Group must raise at least $2 billion of equity from non-affiliated third-parties to set an appropriate benchmark Alibaba Group must pay a higher price to Yahoo! if it raises $500M or more replacement equity within a designated period of time post close (generally the earlier of nine months post closing or April 30, 2013) Financing Alibaba Group will finance the purchase through a combination of cash on hand, debt, equity and equity-linked financing, and the Alibaba Group preferred stock to Yahoo! Financing not committed at announcement Regardless of financing, Yahoo! has the right to put to Alibaba Group 25% of its stake at the floor valuation
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Initial Sale Valuation

The valuation will be based on new equity raised to finance the transaction, with a floor of $13.50 per share, or ~ $35 billion total equity value A progressive incentive discount from 0% to 20% depending on valuation of third-party equity raise
($ in billions, unless otherwise indicated) Equity Value of New Equity Raise Price/Share of New Equity Raise ($) Incentive Discount (%) Gross Consideration to Yahoo! for Shares Sold 1 Incremental Value Sharing Above Floor (Yahoo! / Alibaba) ~35 13.50 0.00 7.1 ~40 15.43 12.50 7.1 23% / 77% ~45 17.36 16.25 7.6 44% / 56% ~50 19.29 20.00 8.1 49% / 51%

Yahoo! also benefits from these incentives through its remaining stake in Alibaba Group:
Yahoo!s pro forma ownership accretes from 20% to ~23%3 Alibaba Group benefits from the incentive discount in which Yahoo! participates pro rata through its ownership interest More attractive valuation benchmark
1 2 3 Assumes 523 million shares sold in the Initial Repurchase (20%) Yahoo! share includes both incremental purchase price and pro rata value of incentive discount through remaining stake Based on Alibaba Groups management guidance regarding sources of financing 6

Initial Sale Other Concurrent Agreements

Under the TIPLA, Alibaba Group currently pays Yahoo! a royalty based on revenue In 2011, the royalty payment was ~$50 million Agreement to amend the TIPLA for an upfront payment of $550 million plus up to 4 additional years of royalty payments Additional royalty payments end upon an IPO, incentivizing an Alibaba Group IPO Agreement to restructure governance rights concurrent with the closing of the initial repurchase Amended governance rights commensurate with reduced stake and on par with rights of Softbank Includes giving up rights to unfilled fifth board seat and certain Yahoo!-specific veto rights Agreement to reduce combined Yahoo! and Softbank voting power to 49.9%

Public Market Liquidity Treatment of the Remaining 50% of Stake

IPO

Sale of 25% of Yahoo!s Alibaba Group stake in a Qualified IPO Price will be the IPO price net of underwriting fees Yahoo! will have input and influence on the selection of underwriters No specific commitment to IPO timing, but Yahoo!s obligation to retain shares to sell at IPO expires in December 2015
Post IPO Right to sell retained shares post-IPO with Alibaba Group marketing support No obligation to sell the remaining stake at a certain time

Initial Sale Alibaba Preferred

One component of the Alibaba financing for the transaction is a preferred instrument issued by Alibaba Group to Yahoo! in the amount of up to $800 million
Security Face Amount Preferred Stock $800 million if 20 points of Yahoos stake is repurchased Reduced to zero if less than 15 points of Yahoos stake is repurchased Alibaba Group may elect to pay cash in lieu of issuing preferred 10% dividend rate At least 3% cash, the remainder accrues and is added to the face amount Rate can decline below 10% depending on credit rating of Alibaba Group Redemption at year 10 Accelerated by one year for each percentage point decline in the dividend rate below 10% Callable at any time at principal plus accrued dividends Acceleration after non-payment of dividend or upon bankruptcy Freely transferable by Yahoo! after 18 months Full tax basis in security
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Dividends

Forced Redemption Call Rights Protective Provisions Transfer Rights

Use of Proceeds Return Substantially All Cash to Shareholders

Yahoo! intends to use substantially all of our after tax cash proceeds for return of capital to shareholders
Currently assuming a minimum of approximately $4 billion of net proceeds after tax, but will not have certainty until after Alibaba Group completes its financing Yahoo! continues to evaluate the form and method of return of capital
Yahoo! Board has approved a $5 billion increase to its share buyback authorization bringing total authorization to ~$5.5 billion concurrently with this transaction

Illustrative Cash Proceeds from Initial Repurchase (Assumes 20% Stake Sale at Floor Valuation)
$ in billions Gross consideration for stake Plus: TIPLA payment Less: Estimated taxes (1) Less: Alibaba preferred note Net after-tax cash proceeds to Yahoo! (2)
1. 2. 38% tax rate and expected basis of approximately $850 million on stake sold Does not add due to rounding 10

$7.1 0.6 (2.6) (0.8) $4.2