<PAGE>

PROSPECTUS
                                           
                                    280,131 SHARES
                                     YAHOO! INC.
                            COMMON STOCK, $0.001 PAR VALUE
                              -------------------------
                                           
    THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.  SEE "RISK
FACTORS" ON PAGE 5 OF THIS PROSPECTUS FOR INFORMATION THAT SHOULD BE CONSIDERED
BY PROSPECTIVE INVESTORS.

                              -------------------------
                                           
    All references herein to "Yahoo!" or the "Company" mean Yahoo! Inc., a
California corporation, unless otherwise indicated by the context.

    The 280,131 shares of Yahoo! Inc. Common Stock, $0.001 par value, covered
by this Prospectus (the "Shares") are offered for the account of certain
shareholders of the Company (the "Selling Shareholders").  259,069 of the Shares
were issued to certain of the Selling Shareholders in connection with a private
placement of the Company's Common Stock on July 29, 1997 (the "Private
Placement"), and 21,062 of the Shares were issued to one of the Selling
Shareholders in connection with the acquisition by the Company of NetControls,
Inc. on July 31, 1997 (the "Acquisition").  For additional information
concerning the Private Placement and the Acquisition, see "Issuance of Common
Stock to Selling Shareholders."  The Selling Shareholders may sell the Shares
from time to time on the over-the-counter market in regular brokerage
transactions, in transactions directly with market makers or in certain
privately negotiated transactions.  See "Plan of Distribution."  Each Selling
Shareholder has advised the Company that no sale or distribution other than as
disclosed herein will be effected until after this Prospectus shall have been
appropriately amended or supplemented, if required, to set forth the terms
thereof.  The Company will not receive any proceeds from the sale of the Shares
by the Selling Shareholders.

    Each of the Selling Shareholders may be deemed to be an "Underwriter," as
such term is defined in the Securities Act of 1933, as amended (the "Securities
Act").

    On July 29, 1997, the Company announced a 3 for 2 forward split of its
Common Stock which will be payable on August 29, 1997 to shareholders of record
on August 11, 1997. The share numbers and share prices contained in this
Prospectus do not reflect the stock split.

    The Company's Common Stock is quoted on the Nasdaq National Market under
the symbol "YHOO."  On August 6, 1997, the last sale price of the Company's
Common Stock on the Nasdaq National Market was $55.00 per share.

                              -------------------------
                                           
              THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
                 THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE 
                  SECURITIES COMMISSION NOR HAS THE SECURITIES AND 
                     EXCHANGE COMMISSION OR ANY STATE SECURITIES 
                       COMMISSION PASSED UPON THE ACCURACY OR 
                          ADEQUACY OF THIS PROSPECTUS.  ANY 
                           REPRESENTATION TO THE CONTRARY 
                                IS A CRIMINAL OFFENSE.
                                           
                              -------------------------
                                           
                    THE DATE OF THIS PROSPECTUS IS AUGUST 7,  1997



<PAGE>

    No person is authorized in connection with any offering made hereby to 
give any information or to make any representation not contained in this 
Prospectus, and, if given or made, such information or representation must 
not be relied upon as having been authorized by the Company or the Selling 
Shareholders.  This Prospectus does not constitute an offer to sell or a 
solicitation of an offer to buy any security other than the shares of Common 
Stock offered hereby, nor does it constitute an offer to sell or a 
solicitation of an offer to buy any of the shares offered hereby to any 
person in any jurisdiction in which it is unlawful to make such an offer or 
solicitation.  Neither the delivery of this Prospectus nor any sale made 
hereunder shall under any circumstances create any implication that the 
information contained herein is correct as of any time subsequent to the date 
hereof.

                                ADDITIONAL INFORMATION
                                           
    This Prospectus constitutes a part of a Registration Statement on Form 
S-3 (herein, together with all amendments and exhibits, referred to as the 
"Registration Statement") filed by the Company with the Securities and 
Exchange Commission (the "Commission") under the Securities Act.  This 
Prospectus does not contain all of the information set forth in the 
Registration Statement, certain parts of which are omitted in accordance with 
the rules and regulations of the Commission.  For further information with 
respect to the Company and the shares of Common Stock offered hereby, 
reference is hereby made to the Registration Statement.  Statements contained 
herein concerning the provisions of any document are not necessarily 
complete, and each such statement is qualified in its entirety by reference 
to the copy of such document filed with the Commission.

                                AVAILABLE INFORMATION
                                           
    The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Commission.  Such reports, proxy and information statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, NW, Washington, D.C. 20549,
and at the following Regional Offices of the Commission: New York Regional
Office, Seven World Trade Center, New York, New York 10048, and Chicago Regional
Office, Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois
60661.  Copies of such material can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, NW, Washington, D.C. 20549 upon
payment of the prescribed fees.  The Company is also required to file electronic
versions of these documents with the Commission through the Commission's
Electronic Data Gathering, Analysis and Retrieval System ("EDGAR").  The Common
Stock of the Company is quoted on the Nasdaq National Market.  Reports, proxy
and information statements and other information concerning the Company may be
inspected at The Nasdaq Stock Market at 1735 K Street, NW, Washington, D.C.
20006. In addition, the Commission maintains a World Wide Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.


                                       2


<PAGE>

                        INFORMATION INCORPORATED BY REFERENCE
                                           
    The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:

1.   The Company's Annual Report on Form 10-K for the year ended December 31, 
1996.

2.   The Company's definitive Proxy Statement dated March 25, 1997, filed in 
connection with the Company's April 30, 1997 Annual Meeting of Shareholders.

3.   The Company's Quarterly Reports on Form 10-Q for the quarters ended 
March 31, 1997 and June 30, 1997.

4.   The Company's Current Report on Form 8-K, filed with the Commission on 
August 4, 1997.

5.   The description of the Company's Common Stock set forth in the Company's 
Registration Statement on Form 8-A, filed with the Commission on March 12, 
1996.

    All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 
or 15(d) of the Exchange Act after the date of this Prospectus and prior to 
the termination of the offering of the Common Stock offered hereby shall be 
deemed to be incorporated by reference in this Prospectus.  Any statement 
contained in a document incorporated by reference herein shall be deemed to 
be modified or superseded for purposes hereof to the extent that a statement 
contained herein (or in any other subsequently filed document which also is 
incorporated by reference herein) modifies or supersedes such statement.  Any 
such statement so modified or superseded shall not be deemed to constitute a 
part hereof, except as so modified or superseded.

    The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents.  Requests should be directed
to Andrea Klipfel, Investor Relations, 3400 Central Expressway, Suite 201, Santa
Clara, California 95051, telephone:  (408) 731-3300.


                                       3


<PAGE>
                                     THE COMPANY
                                           
    Yahoo! is an Internet media company that offers a network of 
globally-branded properties, specialty programming, and aggregated content 
distributed primarily on the World Wide Web (the "Web") serving business 
professionals and consumers, and is among the most widely used guides for 
information and discovery on the Web.

    Under the "Yahoo!" brand, the Company provides intuitive, context-based 
guides to online content, Web search capabilities, aggregated third-party 
content and community and personalization features.  In June 1997, Internet 
users viewed an average of 38 million Web pages per day in "Yahoo!" branded 
properties.

    The Company makes its properties available without charge to users and 
generates revenue primarily through the sale of banner advertising.  
Advertising on Yahoo! properties is sold through the Company's internal 
advertising sales force and third party agents.  During the second quarter of 
1997, more than 900 advertisers purchased advertising on Yahoo! properties.

    Yahoo! was incorporated on March 5, 1995 under the laws of California.  The
Company's principal executive offices are located at 3400 Central Expressway,
Suite 201, Santa Clara, California 95051 and its telephone number is (408)
731-3300.  As used in this Prospectus, the "Company" and "Yahoo!" refer to
Yahoo! Inc., a California corporation, and its wholly owned subsidiaries.


                                       4


<PAGE>

                                     RISK FACTORS
                                           
    THIS PROSPECTUS (INCLUDING THE DOCUMENTS INCORPORATED BY REFERENCE 
HEREIN) CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A 
OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT 
OF 1934, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING THE COMPANY'S 
EXPECTATIONS, BELIEFS, INTENTIONS OR FUTURE STRATEGIES.  ALL FORWARD LOOKING 
STATEMENTS INCLUDED IN THIS DOCUMENT ARE BASED ON INFORMATION AVAILABLE TO 
THE COMPANY ON THE DATE HEREOF, AND THE COMPANY ASSUMES NO OBLIGATION TO 
UPDATE ANY SUCH FORWARD LOOKING STATEMENTS.  ACTUAL RESULTS COULD DIFFER 
MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT 
OF THE RISK FACTORS SET FORTH BELOW AND IN THE DOCUMENTS INCORPORATED BY 
REFERENCE HEREIN.  IN EVALUATING THE COMPANY'S BUSINESS, PROSPECTIVE 
INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN ADDITION TO 
THE OTHER INFORMATION SET FORTH HEREIN OR INCORPORATED HEREIN BY REFERENCE.

EXTREMELY LIMITED OPERATING HISTORY; ANTICIPATED LOSSES

    The Company was incorporated in March 1995 and did not commence 
generating advertising revenues until August 1995.  Accordingly, the Company 
has a limited operating history upon which an evaluation of the Company can 
be based, and its prospects are subject to the risks, expenses and 
uncertainties frequently encountered by companies in the new and rapidly 
evolving markets for Internet products and services, including the Web-based 
advertising market. Specifically, such risks include, without limitation, the 
failure to continue to develop and extend the "Yahoo!" brand, the failure to 
develop new media properties, the rejection of the Company's services by Web 
consumers and/or advertisers, the inability of the Company to maintain and 
increase the levels of traffic on Yahoo! properties, the development of equal 
or superior services or products by competitors, the failure of the market to 
adopt the Web as an advertising medium, the failure to successfully sell 
Web-based advertising through the Company's recently developed internal sales 
force, potential reductions in market prices for Web-based advertising as a 
result of competition or other factors, the inability of the Company to 
effectively integrate the technology and operations or any other acquired 
businesses or technologies with its operations, and the inability to 
identify, attract, retain and motivate qualified personnel.  There can be no 
assurance that the Company will be successful in addressing such risks.  As 
of June 30, 1997, the Company had an accumulated deficit of $23.3 million.  
The extremely limited operating history of the Company and the uncertain 
nature of the markets addressed by the Company make the prediction of future 
results of operations difficult or impossible and, therefore, the recent 
revenue growth experienced by the Company should not be taken as indicative 
of the rate of revenue growth, if any, that can be expected in the future.  
The Company believes that period to period comparisons of its operating 
results are not meaningful and that the results for any period should not be 
relied upon as an indication of future performance.  The Company currently 
expects to significantly increase its operating expenses to expand its sales 
and marketing operations, to fund greater levels of product development and 
to develop and commercialize additional media properties.  The Company also 
has made $19.7 million in advertising revenue guarantees to Netscape over the 
next two years in connection with the NETSCAPE GUIDE BY YAHOO!, a co-branded 
navigational service operated by the Company under an agreement with 
Netscape. See "Risks Associated With NETSCAPE GUIDE BY YAHOO!."  As a result 
of these factors, there can be no assurance that the Company will not incur 
significant losses on a quarterly and annual basis for the foreseeable future.

    For the quarter ended June 30, 1997, the Company reported a net loss of 
$20.5 million ($0.74 per share). These results reflected, among other 
factors, a one-time, non-cash charge of $21,245,000 incurred in connection 
with an agreement relating to Yahoo! MarketPlace LLC, a joint venture 
established in 1996 by the Company, Visa Marketplace, Inc. and Sterling Payot 
Capital, L.P. Under this agreement the Company issued 466,321 shares of 
Common Stock to the Visa Group and the Visa Group released the Company from 
certain obligations and claims, and the Company purchased the Visa Group's 
interest in Yahoo! MarketPlace LLC.

FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

    As a result of the Company's extremely limited operating history, the
Company does not have historical 


                                       5


<PAGE>

financial data for a significant number of periods on which to base planned 
operating expenses.  The Company derives substantially all of its revenues 
from the sale of advertisements under short-term contracts, which are 
difficult to forecast accurately.  The Company's expense levels are based in 
part on its expectations concerning future revenue and to a large extent are 
fixed.  The Company also has fixed expenses in the form of advertising 
revenue guarantees of up to $19.7 million over the next two years relating to 
the NETSCAPE GUIDE BY YAHOO!, which subject the Company to additional risk in 
the event that advertising revenues from this property are not sufficient to 
offset guaranteed payments and related operating expenses. Quarterly revenues 
and operating results depend substantially upon the advertising revenues 
received within the quarter, which are difficult to forecast accurately.  
Accordingly, the cancellation or deferral of a small number of advertising 
contractscould have a material adverse effect on the Company's business, 
results of operations and financial condition.  The Company may be unable to 
adjust spending in a timely manner to compensate for any unexpected revenue 
shortfall, and any significant shortfall in revenue in relation to the 
Company's expectations would have an immediate adverse effect on the 
Company's business, operating results and financial condition.  In addition, 
the Company plans to continue to significantly increase its operating 
expenses to expand its sales and marketing operations, to continue to develop 
and extend the "Yahoo!" brand, to implement and operate the NETSCAPE GUIDE BY 
YAHOO!, to fund greater levels of product development and to develop and 
commercialize additional media properties.  To the extent that such expenses 
precede or are not subsequently followed by increased revenues, the Company's 
business, operating results and financial condition will be materially and 
adversely affected.

    The Company's operating results may fluctuate significantly in the future 
as a result of a variety of factors, many of which are outside the Company's 
control.  These factors include the level of usage of the Internet, demand 
for Internet advertising, seasonal trends in Internet usage and advertising 
placements, the addition or loss of advertisers, the level of user traffic on 
YAHOO! and the Company's other online media properties, the advertising 
budgeting cycles of individual advertisers, the amount and timing of capital 
expenditures and other costs relating to the expansion of the Company's 
operations, the introduction of new products or services by the Company or 
its competitors, pricing changes for Web-based advertising, the timing of 
initial set-up, engineering or development fees that may be paid in 
connection with larger advertising and distribution arrangements, technical 
difficulties with respect to the use of YAHOO! or other media properties 
developed by the Company, incurrence of costs relating to acquisitions, 
general economic conditions and economic conditions specific to the Internet 
and online media. As a strategic response to changes in the competitive 
environment, the Company may from time to time make certain pricing, service 
or marketing decisions or business combinations that could have a material 
adverse effect on the Company's business, results of operations and financial 
condition.  The Company also has experienced, and expects to continue to 
experience, seasonality in its business, with user traffic on YAHOO! and the 
Company's other online media properties being lower during the summer and 
year-end vacation and holiday periods, when usage of the Web and the 
Company's services typically decline.  Additionally, seasonality may also 
affect the amount of customer advertising dollars placed with the Company in 
the first and third calendar quarters as advertisers historically spend less 
during these quarters.

    Due to all of the foregoing factors, in some future quarter the Company's 
operating results may fall below the expectations of securities analysts and 
investors.  In such event, the trading price of the Company's Common Stock 
would likely be materially and adversely affected.

RISKS ASSOCIATED WITH NETSCAPE GUIDE BY YAHOO!

    During March 1997, the Company entered into certain agreements with 
Netscape Communications Corporation (Netscape) under which the Company has 
developed and operates an Internet information navigation service called 
"NETSCAPE GUIDE BY YAHOO!" (the GUIDE). The Co-Marketing agreement provides 
that revenue from advertising on the GUIDE, which is managed by the Company, 
is to be shared between the Company and Netscape. Under the terms of the 
Trademark License agreement, the Company made a one-time non-refundable 
trademark license fee payment of $5,000,000 in March 1997 which is being 
amortized over the initial two-year term, which commenced in May 1997. The 
Company also provided Netscape with a minimum of $10,000,000 in guarantees 
against shared advertising revenues in the first year of the Co-Marketing 
agreement and up to $15,000,000 in the second year of the agreement, subject 
in the second year to certain minimum levels of impressions being reached on 
the GUIDE. In June 1997, an amendment to this agreement was signed whereby 
the first year shared advertising revenue guarantee was reduced to 
$4,660,000. 


                                       6


<PAGE>

    The Netscape Guide agreement exposes the Company to a number of 
significant risks and uncertainties, including, without limitation:  the risk 
that the Company and its sales agents will fail to generate sufficient 
advertising revenue to offset the initial and future guaranteed payments to 
Netscape, including any failure that results from negative trends in the 
Web-based advertising business (such as price erosion) or the inability of 
the Company and its agents to rapidly expand their advertising sales and 
management efforts to match the additional inventory currently anticipated 
from the Guide; the risk that projected user traffic levels for the Guide 
will not be achieved, which may be affected by several factors, such as 
declines or slower growth in the number of users of Netscape's browser 
product; particularly as a result of continued increases in the market share 
of Microsoft Corporation's ("Microsoft") Internet Explorer browser product; 
any failure by the Company to successfully operate the Guide or to provide a 
compelling user experience; the effect of competitive personalized 
information services from other parties; the risk that the Netscape Guide and 
any related services will divert substantial user traffic away from the 
Company's other online media properties, including the YAHOO! main site and 
the MY YAHOO! personalized information service, and thus reduce the Company's 
advertising revenues from such other services (which are not subject to the 
revenue sharing arrangements with Netscape), and potentially dilute the 
strength of the Company's "Yahoo!" brand; the risk that Netscape does not 
elect to renew the agreement at the end of the two year term, after which the 
agreement permits Netscape to use certain elements of the user interface 
developed by the Company without payment of any consideration to the Company; 
and the risk that the Company will not effectively manage the substantial 
additional complexity and scope of operations required for successful 
development and operation of the Guide, including, among others, the 
difficulties associated with higher levels of user traffic and challenges in 
licensing and integrating content from a large number of third party content 
providers on acceptable terms.  As a result of the foregoing factors, there 
can be no assurance that the Company will implement and operate the Guide 
successfully, or that the Guide activities will not have a material adverse 
effect on the Company's business, operating results or financial condition. 

COMPETITION

    The market for Internet products and services is highly competitive and 
competition is expected to continue to increase significantly.  In addition, 
the Company expects the market for Web-based advertising, to the extent it 
continues to develop, to be intensely competitive.  There are no substantial 
barriers to entry in these markets, and the Company expects that competition 
will continue to intensify.  Although the Company currently believes that the 
diverse segments of the Internet market will provide opportunities for more 
than one supplier of products and services similar to those of the Company, 
it is possible that a single supplier may dominate one or more market 
segments.

    The Company competes with many other providers of online navigation,
information and community services.  Many companies offer competitive products
or services addressing Web navigation services, including, among others, Digital
Equipment Corporation (AltaVista), Excite, Inc. ("Excite"), including WebCrawler
and NetFind, the version of Excite's service for America Online ("AOL") users,
Infoseek Corporation, Inktomi, Lycos, Inc. (Lycos and A2Z), Open Text
Corporation (Open Text Index), C|NET (Snap! Online) and Wired (hotbot).  In
addition, the Company competes with metasearch services and software
applications, such as C|NET's search.com service, that allow a user to search
the databases of several directories and catalogs simultaneously.  The Company
also competes indirectly with database vendors that offer information search and
retrieval capabilities with their core database products.  The Company also
faces competition from providers of software and other Internet products and
services that incorporate search and retrieval features into their offerings. 
For example, Web browsers offered by Netscape and Microsoft, which are the most
widely used browsers, incorporate prominent search buttons and similar features
that direct search traffic to competing services, including those that may be
developed or licensed by such parties.  In addition, entities that sponsor or
maintain high-traffic Web sites or that provide an initial point of entry for
Internet users, such as the Regional Bell Operating Companies or Internet
Service Providers ("ISPs") such as Microsoft and AOL, currently offer and could
further develop, acquire or license Internet search and navigation functions
that compete with those offered by the Company.  For example, the Company is
aware that Microsoft intends to offer additional Internet search engine and
directory services that are scheduled to be made publicly available in the near
future. The Company expects that such search and directory services will be
tightly integrated into the Microsoft operating system, the Internet Explorer
browser and other software applications, and that Microsoft may promote such
services within the Microsoft Network of through other end-user services such as


                                       7


<PAGE>

WebTV. Insofar as Microsoft's Internet navigational offerings may be more 
conveniently accessed by users than those of the Company, this may provide 
Microsoft with significant competitive advantages that could have a material 
adverse effect on the Company's business. A large number of Web sites and 
online services (including, among others, the Microsoft Network, AOL, and 
other Web navigation companies such as Excite, Lycos and Infoseek) offer 
informational and community features, such as news, stock quotes, sports 
coverage, Yellow Pages and e-mail listings, weather news, chat services and 
bulletin board listings that are competitive with the services offered by the 
Company.  Several companies, including large companies such as Microsoft and 
AOL and their affiliates, also are developing or currently offer online 
information services for local markets, which compete with the Company's 
regional Yahoo! online properties.  The Company also faces intense 
competition for "Yahoo!" branded online properties in international markets, 
including competition from U.S.-based competitors as well as media and online 
companies that are already well established in those foreign markets.  Many 
of the Company's existing competitors, as well as a number of potential new 
competitors, have significantly greater financial, technical and marketing 
resources than the Company.  In addition, providers of Internet tools and 
services may be acquired by, receive investments from or enter into other 
commercial relationships with larger, well-established and well-financed 
companies, such as Microsoft or Netscape.  For example, AOL is a significant 
shareholder of Excite, and a version of the Excite service (AOL NetFind) has 
been designated as the exclusive Internet search service for use by AOL's 
subscribers.  Greater competition resulting from such relationships could 
have a material adverse effect on the Company's business, operating results 
and financial condition. 

    In the future, the Company expects to face competition in the various 
special interest, demographic and geographic markets addressed by media 
properties that are under development.  This competition may include 
companies that are larger and better capitalized than the Company and that 
have expertise and established brand recognition in these markets.  There can 
be no assurance that the Company's competitors will not develop Internet 
products and services that are superior to those of the Company or that 
achieve greater market acceptance than the Company's offerings.  Moreover, a 
number of the Company's current advertising customers, licensees and partners 
have also established relationships with certain of the Company's 
competitors, and future advertising customers, licensees and partners may 
establish similar relationships.

    The Company also competes with online services and other Web site 
operators, as well as traditional offline media such as television, radio and 
print for a share of advertisers' total advertising budgets.  The Company 
believes that the number of companies selling Web-based advertising and the 
available inventory of advertising space have increased substantially during 
recent periods.  Accordingly, the Company may face increased pricing pressure 
for the sale of advertisements.  There can be no assurance that the Company 
will be able to compete successfully against its current or future 
competitors or that competition will not have a material adverse effect on 
the Company's business, operating results and financial condition. 

    The Company believes that the principal competitive factors in its 
markets are brand recognition, ease of use, comprehensiveness, independence, 
quality and responsiveness of search results, the availability of targeted 
content and focused value added products and services, and access to end 
users.  Competition among current and future suppliers of Internet 
navigational and informational services, high-traffic Web sites and ISPs, as 
well as competition with other media for advertising placements, could result 
in significant price competition and reductions in advertising revenues. 
Moreover, many of the Company's current and potential competitors have 
significantly greater financial, technical, marketing, distribution and other 
resources than the Company.  There can be no assurance that the Company will 
be able to compete successfully against current and future sources of 
competition or that the competitive pressures faced by the Company will not 
have a material adverse effect on the Company's business, operating results 
and financial condition.

DEPENDENCE ON CONTINUED GROWTH IN USE OF THE INTERNET

    The Company's future success is substantially dependent upon continued
growth in the use of the Internet and the Web in order to support the sale of
advertising on the Company's online media properties.  Rapid growth in the use
of and interest in the Internet and the Web is a recent phenomenon. There can be
no assurance that communication or commerce over the Internet will become more
widespread or that extensive content will continue to be provided over the
Internet.  The Internet may not prove to be a viable commercial marketplace for
a number of reasons, including lack of acceptable security technologies,
potentially inadequate development of the necessary 


                                       8


<PAGE>

infrastructure, such as a reliable network backbone, or timely development 
and commercialization of performance improvements, including high speed 
modems.  In addition, to the extent that the Internet continues to experience 
significant growth in the number of users and level of use, there can be no 
assurance that the Internet infrastructure will continue to be able to 
support the demands placed upon it by such potential growth or that the 
performance or reliability of the Web will not be adversely affected by this 
continued growth.  In addition, the Internet could lose its viability due to 
delays in the development or adoption of new standards and protocols required 
to handle increased levels of Internet activity, or due to increased 
governmental regulation.  Changes in or insufficient availability of 
telecommunications services to support the Internet also could result in 
slower response times and adversely affect usage of the Web and the Company's 
online media properties.  If use of the Internet does not continue to grow, 
or if the Internet infrastructure does not effectively support growth that 
may occur, the Company's business, operating results and financial condition 
would be materially and adversely affected.

DEVELOPING MARKET; UNPROVEN ACCEPTANCE OF THE COMPANY'S PRODUCTS AND MEDIA
PROPERTIES

    The markets for the Company's products and media properties have only 
recently begun to develop, are rapidly evolving and are characterized by an 
increasing number of market entrants who have introduced or developed 
information navigation products and services for use on the Internet and the 
Web.  As is typical in the case of a new and rapidly evolving industry, 
demand and market acceptance for recently introduced products and services 
are subject to a high level of uncertainty and risk.  Because the market for 
the Company's products and media properties is new and evolving, it is 
difficult to predict the future growth rate, if any, and size of this market. 
There can be no assurance either that the market for the Company's products 
and media properties will develop or that demand for the Company's products 
or media properties will emerge or become sustainable.  The Company's ability 
to successfully develop additional targeted media properties depends 
substantially on use of YAHOO! to promote such properties.  If use of YAHOO! 
fails to continue to grow, the Company's ability to establish other targeted 
properties would be materially and adversely affected.  If the market fails 
to develop, develops more slowly than expected or becomes saturated with 
competitors, or if the Company's products and media properties do not achieve 
or sustain market acceptance, the Company's business, operating results and 
financial condition will be materially and adversely affected.

RISKS ASSOCIATED WITH BRAND DEVELOPMENT

    The Company believes that establishing and maintaining the "Yahoo!" brand 
is a critical aspect of its efforts to attract and expand its Internet 
audience and that the importance of brand recognition will increase due to 
the growing number of Internet sites and the relatively low barriers to 
entry.  Promotion and enhancement of the "Yahoo!" brand will depend largely 
on the Company's success in providing high quality products and services, 
which cannot be assured.  If consumers do not perceive the Company's existing 
products and services to be of high quality, or if the Company introduces new 
products and services or enters into new business ventures that are not 
favorably received by consumers,  the Company will be unsuccessful in 
promoting and maintaining its brand, and will risk diluting its brand and 
decreasing the attractiveness of its audiences to advertisers.  Furthermore, 
in order to attract and retain Internet users and to promote and maintain the 
"Yahoo!" brand in response to competitive pressures, the Company may find it 
necessary to increase substantially its financial commitment to creating and 
maintaining a distinct brand loyalty among consumers.  If the Company is 
unable to provide high quality products and services or otherwise fails to 
promote and maintain its brand, or if the Company incurs excessive expenses 
in an attempt to improve its products and services or promote and maintain 
its brand, the Company's business, operating results and financial condition 
will be materially and adversely affected.

RELIANCE ON ADVERTISING REVENUES AND UNCERTAIN ADOPTION OF THE WEB AS AN 
ADVERTISING MEDIUM

    The Company derives substantially all of its revenues from the sale of
advertisements on its Web pages under short-term contracts.  Most of the
Company's advertising customers have only limited experience with the Web as an
advertising medium, have not devoted a significant portion of their advertising
expenditures to Web-based advertising and may not find such advertising to be
effective for promoting their products and services relative to traditional
print and broadcast media.  The Company's ability to generate significant
advertising revenues will depend upon, among other things, advertisers'
acceptance of the Web as an effective and sustainable advertising medium, the
development of a large base of users of the Company's services possessing
demographic characteristics 


                                       9


<PAGE>

attractive to advertisers, and the ability of the Company to develop and 
update effective advertising delivery and measurement systems.  No standards 
have yet been widely accepted for the measurement of the effectiveness of 
Web-based advertising, and there can be no assurance that such standards will 
develop sufficiently to support Web-based advertising as a significant 
advertising medium.  In addition, there can be no assurance that the 
advertisers will determine that banner advertising, which comprises 
substantially all of the Company's revenues, is an effective or attractive 
advertising medium, and there can be no assurance that the Company will 
effectively transition to any other forms of Web-based advertising, should 
they develop. Certain advertising filter software programs are available that 
limit or remove advertising from an Internet user's desktop.  Such software, 
if generally adopted by users, may have a materially adverse effect upon the 
viability of advertising on the Internet. The Company relies primarily on its 
internal advertising sales force for domestic advertising sales, which 
involves additional risks and uncertainties, including (among others) risks 
associated with the recruitment, retention, management, training and 
motivation of sales personnel.  As a result of these factors, there can be no 
assurance that the Company will sustain or increase current advertising sales 
levels.  Failure to so will have a material adverse effect on the Company's 
business, operating results and financial position. 

    In addition, there is intense competition in the sale of advertising on 
the Internet, including competition from other Internet navigational tools as 
well as other high-traffic sites, which has resulted in a wide range of rates 
quoted by different vendors for a variety of advertising services, which 
makes it difficult to project future levels of Internet advertising revenues 
that will be realized generally or by any specific company.  Competition 
among current and future suppliers of Internet navigational services or Web 
sites and advertising networks, as well as competition with other traditional 
media for advertising placements, could result in significant price 
competition, reduced pricing for Internet advertising and reductions in the 
Company's advertising revenues. There also can be no assurance that the 
Company's advertising customers will accept the internal and third-party 
measurements of impressions received by advertisements on YAHOO!, the 
Company's online media properties, or that such measurements will not contain 
errors.

SUBSTANTIAL DEPENDENCE UPON THIRD PARTIES

    The Company depends substantially upon third parties for several critical 
elements of its business including, among others, technology and 
infrastructure, development of targeted content for localized Internet 
navigational guides, distribution activities and, to a lesser extent, 
advertising sales. 

TECHNOLOGY AND INFRASTRUCTURE

    The Company supplements its Internet directory listings with full-text 
Web search results provided by AltaVista, a division of Digital Equipment 
Corporation ("Digital"), under a non-exclusive agreement.  The Company 
believes that these search results provide a key competitive element for its 
Internet navigation services.  The Company therefore depends substantially 
upon ongoing maintenance and technical support from Digital to ensure 
accurate and rapid presentation of such search results to the Company's 
customers.  Any failure of Digital to effectively provide such search results 
could have a material adverse effect on the Company's business, operating 
results and financial condition.  In addition, any termination of the 
agreement with Digital or Digital's failure to renew such agreement upon 
expiration could result in substantial additional costs to the Company in 
developing or licensing replacement technology, and could result in a loss of 
levels of use of the Company's navigational services. The Company also relies 
on a private third party provider, GlobalCenter, Inc. ("GlobalCenter"), to 
provide the Company with access to three partial T3 (45 megabit per second) 
Internet connections.  Any disruption in the Internet access provided by 
GlobalCenter or any failure of GlobalCenter to handle current or higher 
volumes of queries could have a material adverse effect on the Company's 
business, operating results and financial condition.  The Company also 
licenses technology and related databases from third parties for certain 
elements of Yahoo! properties, including, among others, technology underlying 
news, stock quotes and current financial information, chat services, street 
mapping, telephone and e-mail listings and similar services. The Company has 
experienced and expects to continue to experience interruptions and delays in 
service and availability for such elements, such as recent interruptions in 
the Company's stock quote services.  Any errors, failures or delays 
experienced in connection with these third party technologies and information 
services could negatively impact the Company's relationship with users and 
adversely affect the Company's brand and its business, and could expose the 
Company to liabilities to third parties.


                                       10


<PAGE>

CONTENT DEVELOPMENT

    A key element of the Company's strategy involves the implementation of 
Yahoo! branded media properties targeted for interest areas, demographic 
groups and geographic areas.  In these efforts, the Company has relied and 
will continue to rely substantially on content development and localization 
efforts of third parties.  For example, the Company has entered into an 
agreement with Ziff-Davis pursuant to which Ziff-Davis publishes two online 
publications and a print magazine under the "Yahoo!" brand.  The Company also 
expects to rely exclusively on third party affiliates, including SOFTBANK in 
Japan, Rogers Communications ("Rogers") in Canada, and Ziff-Davis in European 
countries to localize, maintain and promote these services and to sell 
advertising in local markets.  There can be no assurance that the Company's 
current or future third-party affiliates will effectively implement these 
properties, or that their efforts will result in significant revenue to the 
Company.  Any failure of these parties to develop and maintain high-quality 
and successful media properties also could result in dilution to the "Yahoo!" 
brand, which could have a material adverse effect on the Company's business, 
results of operations and financial condition.

DISTRIBUTION RELATIONSHIPS

    The Company has entered into certain distribution agreements and informal 
relationships with software vendors and operators of online networks and 
leading Web sites, such as Microsoft and Netscape.  The Company believes 
these arrangements are important to the promotion of the Company's online 
media properties particularly among new Web users who may first access the 
Web through these services or Web sites.  The Company's business 
relationships with these companies consist of cooperative marketing programs 
and licenses to include YAHOO! in online networks or services offered by 
these parties, which are intended to increase the use and visibility of 
YAHOO!.  These distribution arrangements typically are not exclusive, and may 
be terminable upon little or no notice. Third parties that provide 
distribution channels for the Company may also assess fees or otherwise 
impose additional conditions on the listing of YAHOO! or other online 
properties of the Company, such as Netscape's requirement of substantial 
payments for placement of YAHOO! on the "Net Search" Web page accessible from 
a button on the Netscape Web browser.  In April 1997, the Company also 
launched the NETSCAPE GUIDE BY YAHOO!.  See "Risks Associated With NETSCAPE 
GUIDE BY YAHOO!."  In addition, these companies may terminate or reduce their 
joint marketing activities with the Company, or develop and market their own 
Internet navigational guides or those of the Company's competitors.  Any such 
events could have a material adverse effect on the Company's business, 
results of operations and financial condition.

THIRD PARTY ADVERTISING SALES AGENTS

    The Company relies and expects to continue to rely on third parties to 
sell advertising on mirror sites of YAHOO! and targeted media products, 
particularly versions of YAHOO! that are localized for international markets. 
There can be no assurance that such advertising representatives will achieve 
the Company's advertising sales objectives. Because advertising sales have 
constituted and are expected to continue to constitute substantially all of 
the Company's revenues, any failure of the Company's third party sales 
representatives to achieve successful advertising sales could have a material 
adverse effect on the Company's business, operating results and financial 
condition.

ENHANCEMENT OF YAHOO! MAIN SITE AND DEVELOPMENT OF NEW MEDIA PROPERTIES

    To remain competitive, the Company must continue to enhance and improve 
the responsiveness, functionality, features and content of the YAHOO! main 
site, as well as the Company's other branded media properties, such as the 
NETSCAPE GUIDE BY YAHOO!.  There can be no assurance that the Company will be 
able to successfully maintain competitive user response times or implement 
new features and functions, such as greater levels of user personalization, 
localized content filter and information delivery through "push" methods, 
which will involve the development of increasingly complex technologies. 

    The Company's future success also depends in part upon the timely
processing of Web site listings submitted by users and Web content providers,
which have increased substantially in recent periods.  The Company 


                                       11


<PAGE>

has from time to time experienced significant delays in the processing of 
submissions, and further delays could have a material adverse effect on the 
Company's goodwill among Web users and content providers, and on the 
Company's business.

    A key element of the Company's business strategy is the development and 
introduction of new YAHOO! branded navigational products targeted for 
specific interest areas, user groups with particular demographic 
characteristics and geographic areas.  There can be no assurance that the 
Company will be successful in developing, introducing and marketing such 
products or media properties or that such products and media properties will 
achieve market acceptance, enhance the Company's brand name recognition or 
increase traffic on Yahoo!'s online properties.  The Company depends 
substantially on third party efforts in the development and operation of 
these new media properties.  The introduction of new media properties also 
may be subject to delays that may negatively affect advertising revenues and 
the Company's competitive position.  Furthermore, enhancements of or 
improvements to YAHOO! or new media properties may contain undetected errors 
that require significant design modifications, resulting in a loss of 
customer confidence and user support and a decrease in the value of the 
Company's brand name recognition.  Any failure of the Company to effectively 
develop and introduce these properties, or failure of such properties to 
achieve market acceptance, could adversely affect the Company's business, 
results of operations and financial condition.

TECHNOLOGICAL CHANGE

    The market for Internet products and services is characterized by rapid 
technological developments, evolving industry standards and customer demands, 
and frequent new product introductions and enhancements.  These market 
characteristics are exacerbated by the emerging nature of this market and the 
fact that many companies are expected to introduce new Internet products and 
services in the near future.  The Company's future success will depend in 
significant part on its ability to continually improve the performance, 
features and reliability of YAHOO! and other properties in response to both 
evolving demands of the marketplace and competitive product offerings, and 
there can be no assurance that the Company will be successful in doing so. In 
addition, the widespread adoption of new Web functionality through 
developments such as the Java programming language and increasingly 
personalized information filtering and delivery could require fundamental 
changes in the Company's services and could fundamentally affect the nature, 
viability and measurability of Web-based advertising, which could adversely 
affect the Company's business, operating results and financial condition.

MANAGEMENT OF POTENTIAL GROWTH

    The Company's recent growth has placed, and is expected to continue to 
place, a significant strain on its managerial, operational and financial 
resources.  To manage its potential growth, the Company must continue to 
implement and improve its operational and financial systems and to expand, 
train and manage its employee base.  The Company also currently intends to 
establish mirror, or duplicate, sites in other geographic locations, which 
will create additional operational and management complexities, including the 
need for continual updating and maintenance of directory listings among 
geographically dispersed network servers.  The Company also expects that its 
operational and management systems will face additional strain as a result of 
the development and operation of the NETSCAPE GUIDE BY YAHOO!.  See "Risks 
Associated With NETSCAPE GUIDE BY YAHOO!."  The process of managing 
advertising within large, high traffic Web sites such as YAHOO! is an 
increasingly important and complex task.  The Company relies on both internal 
and licensed third party advertising inventory management and analysis 
systems.  To the extent that any extended failure of the Company's 
advertising management system results in incorrect advertising insertions, 
the Company may be exposed to "make good" obligations with its advertising 
customers, which, by displacing advertising inventory, could defer 
advertising revenues and thereby have a material adverse effect on the 
Company's business, operating results and financial condition.  There can be 
no assurance that the Company will be able to effectively manage the 
expansion of its operations, that the Company's systems, procedures or 
controls will be adequate to support the Company's operations or that Company 
management will be able to achieve the rapid execution necessary to fully 
exploit the market opportunity for the Company's products and media 
properties.  Any inability to effectively manage growth, if any, could have a 
material adverse effect on the Company's business, operating results and 
financial condition.

RISK OF CAPACITY CONSTRAINTS AND SYSTEMS FAILURES


                                       12


<PAGE>

    A key element of the Company's strategy is to generate a high volume of 
use of its online media properties.  Accordingly, the performance of the 
Company's online media properties is critical to the Company's reputation, 
its ability to attract advertisers to the Company's Web sites and to achieve 
market acceptance of these products and media properties.  Any system failure 
that causes interruption or an increase in response time of the Company's 
products and media properties could result in less traffic to the Company's 
Web sites and, if sustained or repeated, could reduce the attractiveness of 
the Company's products and media properties to advertisers and licensees.  An 
increase in the volume of queries conducted through the Company's products 
and media properties could strain the capacity of the software or hardware 
deployed by the Company, which could lead to slower response time or system 
failures, and adversely affect the number of impressions received by 
advertising and thus the Company's advertising revenues.  In addition, as the 
number of Web pages and users increase, there can be no assurance that the 
Company's products and media properties and infrastructure will be able to 
scale accordingly.  The Company also faces technical challenges associated 
with higher levels of personalization and localization of content delivered 
to users of its services, which adds strain to the Company's development and 
operational resources.  The Company is also dependent upon Web browsers and 
Internet and online service providers for access to its products and media 
properties.  In particular, a private third party provider, GlobalCenter, 
provides the Company with access to three partial T3 (45 megabit per second) 
Internet connections.  In the past, users have occasionally experienced 
difficulties due to system failures, including failures unrelated to the 
Company's systems.  Any disruption in the Internet access provided by 
GlobalCenter or any failure of GlobalCenter to handle higher volumes of user 
traffic could have a material adverse effect on the Company's business, 
operating results and financial condition.  Furthermore, the Company is 
dependent on hardware suppliers for prompt delivery, installation and service 
of servers and other equipment used to deliver the Company's products and 
services.

    The Company's operations are dependent in part upon its ability to 
protect its operating systems against physical damage from fire, floods, 
earthquakes, power loss, telecommunications failures, break-ins and similar 
events.  The Company does not presently have redundant, multiple site 
capacity in the event of any such occurrence.  Despite the implementation of 
network security measures by the Company, its servers are vulnerable to 
computer viruses, break-ins and similar disruptions from unauthorized 
tampering with the Company's computer systems.  The occurrence of any of 
these events could result in interruptions, delays or cessations in service 
to users of the Company's products and media properties, which could have a 
material adverse effect on the Company's business, operating results and 
financial condition.

INTEGRATION OF POTENTIAL ACQUISITIONS

    Since inception, the Company has formed a number of joint ventures, and 
recently the Company acquired a small software development company involved 
in the delivery of current information through the Internet.  As part of its 
business strategy, the Company expects to enter into further business 
combinations and/or make significant investments in complementary companies, 
products or technologies.  Any such transactions would be accompanied by the 
risks commonly encountered in such transactions.  Such risks include, among 
other things, the difficulty of assimilating the operations and personnel of 
the acquired companies, the potential disruption of the Company's ongoing 
business, the inability of management to maximize the financial and strategic 
position of the Company through the successful incorporation of acquired 
technology or content and rights into the Company's products and media 
properties, the difficulties of integrating personnel of acquired entities, 
additional expenses associated with amortization of acquired intangible 
assets, the maintenance of uniform standards, controls, procedures and 
policies, the impairment of relationships with employees and customers as a 
result of any integration of new management personnel, and the potential 
unknown liabilities associated with acquired businesses.  There can be no 
assurance that the Company would be successful in overcoming these risks or 
any other problems encountered in connection with such acquisitions.

TRADEMARKS AND PROPRIETARY RIGHTS

    The Company regards its copyrights, trademarks, trade dress, trade secrets
and similar intellectual property as critical to its success, and the Company
relies upon trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with its employees, customers,
partners and others to protect its proprietary rights.  The Company pursues the
registration of its trademarks in the United States and (based upon 


                                       13


<PAGE>

anticipated use) internationally, and has applied for the registration of 
certain of its trademarks, including "Yahoo!" and "Yahooligans!"  Effective 
trademark, copyright and trade secret protection may not be available in 
every country in which the Company's products and media properties are 
distributed or made available through the Internet.  The Company has licensed 
in the past, and it expects that it may license in the future, elements of 
its distinctive trademarks, trade dress and similar proprietary rights to 
third parties, including in connection with branded mirror sites of YAHOO! 
and other media properties that may be controlled operationally by third 
parties.  While the Company attempts to ensure that the quality of its brand 
is maintained by such licensees, no assurances can be given that such 
licensees will not take actions that could materially and adversely affect 
the value of the Company's proprietary rights or the reputation of its 
products and media properties, either of which could have a material adverse 
effect on the Company's business. Also, the Company is aware that third 
parties have from time to time copied significant portions of YAHOO! 
directory listings for use in competitive Internet navigational tools and 
services, and there can be no assurance that the distinctive elements of 
YAHOO! will be protectible under copyright law.  There can be no assurance 
that the steps taken by the Company to protect its proprietary rights will be 
adequate or that third parties will not infringe or misappropriate the 
Company's copyrights, trademarks, trade dress and similar proprietary rights. 
In addition, there can be no assurance that other parties will not assert 
infringement claims against the Company.

    Many parties are actively developing search, indexing and related Web 
technologies at the present time.  The Company believes that such parties 
have taken and will continue to take steps to protect these technologies, 
including seeking patent protection.  As a result, the Company believes that 
disputes regarding the ownership of such technologies are likely to arise in 
the future.

    From time to time the Company has been, and expects to continue to be, 
subject to legal proceedings and claims in the ordinary course of its 
business, including claims of alleged infringement of the trademarks and 
other intellectual property rights of third parties by the Company and its 
licensees. Such claims, even if not meritorious, could result in the 
expenditure of significant financial and managerial resources.  As of the 
date of this Prospectus, the Company is not aware of any legal proceedings or 
claims that the Company believes will have, individually or in the aggregate, 
a material adverse effect on the Company's financial position or results of 
operations.

DEPENDENCE ON KEY PERSONNEL

    The Company's performance is substantially dependent on the performance 
of its senior management and key technical personnel.  In particular, the 
Company's success depends substantially on the continued efforts of its 
senior management team.  The Company does not carry key person life insurance 
on any of its senior management personnel.  The loss of the services of any 
of its executive officers or other key employees could have a material 
adverse effect on the business, operating results and financial condition of 
the Company.

    The Company's future success also depends on its continuing ability to 
attract and retain highly qualified technical and managerial personnel. 
Competition for such personnel is intense and there can be no assurance that 
the Company will be able to retain its key managerial and technical employees 
or that it will be able to attract and retain additional highly qualified 
technical and managerial personnel in the future.  The inability to attract 
and retain the necessary technical and managerial personnel could have a 
material and adverse effect upon the Company's business, operating results 
and financial condition.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES

    The Company is not currently subject to direct regulation by any government
agency in the United States, other than regulations applicable to businesses
generally, and there are currently few laws or regulations directly applicable
to access to or commerce on the Internet.  Due to the increasing popularity and
use of the Internet, it is possible that a number of laws and regulations may be
adopted with respect to the Internet, covering issues such as user privacy,
pricing and characteristics and quality of products and services.  For example,
although the Communications Decency Act was held to be unconstitutional, there
can be no assurance that similar legislation will not be enacted in the future
and it is possible that such legislation could expose the Company to substantial
liability. Such legislation could also dampen the growth in use of the Web
generally and decrease the acceptance of the Web as a communications and
commercial medium, and could, thereby, have a material adverse effect on the
Company's 


                                       14


<PAGE>

business, results of operations and financial condition. Other nations, 
including Germany, have taken actions to restrict the free flow of material 
deemed to be objectionable on the Web. In addition, several 
telecommunications carriers are seeking to have telecommunications over the 
Web regulated by the Federal Communications Commission (the "FCC") in the 
same manner as other telecommunications services. For example, America's 
Carriers Telecommunications Association ("ACTA") has filed a petition with 
the FCC for this purpose. In addition, because the growing popularity and use 
of the Web has burdened the existing telecommunications infrastructure and 
many areas with high Web use have begun to experience interruptions in phone 
service, local telephone carriers, such as Pacific Bell, have petitioned the 
FCC to regulate ISPs and OSPs in a manner similar to long distance telephone 
carriers and to impose access fees on the ISPs and OSPs. If either of these 
petitions is granted, or the relief sought therein is otherwise granted, the 
costs of communicating on the Web could increase substantially, potentially 
slowing the growth in use of the Web, which could in turn decrease the demand 
for the Company's products and media properties. Also it is possible that 
laws will be adopted or current laws interpreted in a manner to impose 
liability on online service providers such as the Company for listing or 
linking to third party Web sites that include materials that infringe 
copyrights or other rights of others. Such laws and regulations if enacted 
could have an adverse effect on the Company's business, operating results and 
financial condition.  Moreover, the applicability to the Internet of the 
existing laws governing issues such as property ownership, copyright 
defamation, obscenity and personal privacy is uncertain, and the Company may 
be subject to claims that its services violate such laws. Any such new 
legislation or regulation or the application of existing laws and regulations 
to the Internet could have a material adverse effect on the Company's 
business, operating results and financial condition.

    Due to the global nature of the Web, it is possible that, although 
transmissions by the Company over the Internet originate primarily in the 
State of California, the governments of other states and foreign countries 
might attempt to regulate the Company's transmissions or prosecute the 
Company for violations of their laws.  There can be no assurance that 
violations of local laws will not be alleged or charged by state or foreign 
governments, that the Company might not unintentionally violate such law or 
that such laws will not be modified, or new laws enacted, in the future. Any 
of the foregoing developments could have a material adverse effect on the 
Company's business, results of operations and financial condition.

    As part of its advertising sales efforts, the Company from time to time 
promotes sweepstakes and similar events on Yahoo! properties, and may 
participate in the design and implementation of such events on behalf of 
sponsors. Such events are subject to extensive government regulation 
throughout the world, including different regulatory schemes under states and 
territories in the United States. Failure to comply with such regulations 
could expose the Company to substantial liabilities. 

LIABILITY FOR INFORMATION SERVICES

    Because materials may be downloaded by the online or Internet services
operated or facilitated by the Company and may be subsequently distributed to
others, there is a potential that claims will be made against the Company for
defamation, negligence, copyright or trademark infringement, personal injury or
other theories based on the nature and content of such materials.  Such claims
have been brought, and sometimes successfully pressed, against online service
providers in the past.  In addition, the Company could be exposed to liability
with respect to the selection of listings that may be accessible through the
Company's Yahoo!-branded products and media properties, or through content and
materials that may be posted by users in classifieds, bulletin board and chat
room services offered by the Company.  Such claims might include, among others,
that by providing hypertext links to Web sites operated by third parties, the
Company is liable for infringement or other wrongful actions by such third
parties through such Web sites.  It is also possible that if any information
provided through the Company's services, such as stock quotes, analyst estimates
or other trading information, contains errors, third parties could make claims
against the Company for losses incurred in reliance on such information. From
time to time, the Company enters into agreements with sponsors, content
providers, service providers and merchants under which the Company is entitled
to receive a share of revenue from the purchase of goods and services by users
of the Company's online properties. Such revenue arrangements, if significant,
would expose the Company to additional risks and uncertainties, including
(without limitation) seasonal variations associated with the market for such
products and services, competitive and other business factors relating to such
markets, and potential liabilities to consumers of such products and services.
Although the Company carries general liability insurance, the Company's
insurance may not cover potential claims of this type or may not be adequate to
indemnify the Company for all liability that may be 


                                       15


<PAGE>

imposed.  Any imposition of liability or legal defense expenses that are not 
covered by insurance or is in excess of insurance coverage could have a 
material adverse effect on the Company's business, operating results and 
financial condition
 
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS AND EXPANSION

    A key part of the Company's strategy is to develop "Yahoo!" branded 
online properties in international markets.  The Company has developed and 
operates, through joint ventures with SOFTBANK and SB Holdings (Europe) Ltd., 
versions of the YAHOO! Internet Guide localized for Japan, Germany, France 
and the U.K, and the Company offers a version of YAHOO! localized for Canada 
under an agreement with Rogers Communications.  International revenues (sales 
outside of North America) were approximately 1% of total revenues for the 
year ended December 31, 1996, and approximately 6% for the six months ended 
June 30, 1997.

    To date, the Company has only limited experience in developing localized 
versions of its products and marketing and operating its products and 
services internationally, and the Company relies substantially on the efforts 
and abilities of its foreign business partners in such activities.  If the 
international revenues are not adequate to offset investments in such 
activities, the Company's business, operating results and financial condition 
could be materially adversely affected.  The Company may experience 
difficulty in managing international operations as a result of distance as 
well as language and cultural differences, and there can be no assurance that 
the Company or its partners will be able to successfully market and operate 
its products and services in foreign markets.  The Company also believes that 
in light of substantial anticipated competition, it will be necessary to move 
quickly into international markets in order to effectively obtain market 
share, and there can be no assurance that the Company will be able to do so. 
In addition to the uncertainty as to the Company's ability to continue to 
generate revenues from its foreign operations and expand its international 
presence, there are certain risks inherent in doing business on an 
international level, such as unexpected changes in regulatory requirements, 
export restrictions, trade barriers, difficulties in staffing and managing 
foreign operations, longer payment cycles, problems in collecting accounts 
receivable, political instability, fluctuations in currency exchange rates, 
software piracy, seasonal reductions in business activity in certain other 
parts of the world and potentially adverse tax consequences, which could 
adversely impact the success of the Company's international operations. There 
can be no assurance that one or more of such factors will not have a material 
adverse effect on the Company's future international operations and, 
consequently, on the Company's business, operating results and financial 
condition.

RISKS ASSOCIATED WITH LITIGATION

    From time to time the Company has been, and expects to continue to be, 
subject to legal proceedings and claims in the ordinary course of its 
business, including, among others, claims of alleged infringement of the 
trademarks and other intellectual property rights of third parties by the 
Company and its licensees and contractual disputes with advertisers and 
content or distribution providers.  For example, the Company was recently 
served with a complaint for an action in the E-101st Judicial District of 
Texas by GTE New Media Services, Inc. ("GTE") in which GTE alleges that the 
Company tortiously interfered with an alleged contractual relationship 
between GTE and one of the Company's business partners in connection with a 
content sponsorship arrangement.  Such claims, even if not meritorious, could 
result in the expenditure of significant financial and managerial resources.  
Although the Company cannot predict the outcome of any proceeding, the 
Company is not currently aware of any legal proceedings or claims that the 
Company believes will have, individually or in the aggregate, a material 
adverse effect on the Company's financial condition or results of operation.

CONCENTRATION OF STOCK OWNERSHIP

    As of June 30, 1997, the present directors, executive officers, greater 
than 5% shareholders and their respective affiliates beneficially owned 
approximately 78% of the outstanding Common Stock of the Company.  As of June 
30, 1997, SOFTBANK beneficially owned approximately 34% of the outstanding 
Common Stock of the Company.  As a result of their ownership, the directors, 
executive officers, greater than 5% shareholders (including SOFTBANK) and 
their respective affiliates collectively are able to control all matters 
requiring shareholder approval, including the election of directors and 
approval of significant corporate transactions.  Such concentration of 
ownership may also have the effect of delaying or preventing a change in 
control of the Company.


                                       16


<PAGE>

VOLATILITY OF STOCK PRICE

    The trading price of the Company's Common Stock has been and may continue 
to be subject to wide fluctuations in response to a number of events and 
factors, such as quarterly variations in operating results, announcements of 
technological innovations or new products and media properties by the Company 
or its competitors, changes in financial estimates and recommendations by 
securities analysts, the operating and stock price performance of other 
companies that investors may deem comparable to the Company, and news reports 
relating to trends in the Company's markets.  In addition, the stock market 
in general, and the market prices for Internet-related companies in 
particular, have experienced extreme volatility that often has been unrelated 
to the operating performance of such companies. These broad market and 
industry fluctuations may adversely affect the trading price of the Company's 
Common Stock, regardless of the Company's operating performance.

ANTITAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS

    The Board of Directors has the authority to issue up to 10,000,000 shares
of Preferred Stock and to determine the price, rights, preferences, privileges
and restrictions, including voting rights, of those shares without any further
vote or action by the shareholders.  The rights of the holders of Common Stock
may be subject to, and may be adversely affected by, the rights of the holders
of any Preferred Stock that may be issued in the future.  The issuance of
Preferred Stock may have the effect of delaying, deferring or preventing a
change of control of the Company without further action by the shareholders and
may adversely affect the voting and other rights of the holders of Common Stock.
The Company has no present plans to issue shares of Preferred Stock.  Further,
certain provisions of the Company's charter documents, including provisions
eliminating the ability of shareholders to take action by written consent and
limiting the ability of shareholders to raise matters at a meeting of
shareholders without giving advance notice, may have the effect of delaying or
preventing changes in control or management of the Company, which could have an
adverse effect on the market price of the Company's Common Stock.  In addition,
effective upon qualification of the Company as a "listed corporation," as
defined in Section 301.5(d) of the California Corporations Code, the Company's
charter documents eliminated cumulative voting and provide that, at such time as
the Company has at least six directors, the Company's Board of Directors will be
divided into two classes, each of which serves for a staggered two-year term,
which may make it more difficult for a third party to gain control of the
Company's Board of Directors.


                                       17


<PAGE>

                                   USE OF PROCEEDS
                                           
    The proceeds from the sale of the Shares are solely for the account of 
the Selling Shareholders.  Accordingly, the Company will not receive any 
proceeds from the sale of the Shares from the Selling Shareholders. 

                                 SELLING SHAREHOLDERS
                                           
    The following table sets forth certain information known to the Company 
with respect to beneficial ownership of the Company's Common Stock as of 
August 1, 1997 by each Selling Shareholder. 


<TABLE>
<CAPTION>
                                            SHARES BENEFICIALLY OWNED                SHARES BENEFICIALLY OWNED 
                                             PRIOR TO THE OFFERING(1)                  AFTER THE OFFERING(2)
                                            -------------------------   SHARES       -------------------------
SELLING SHAREHOLDERS                           SHARES    PERCENT (3)    OFFERED      SHARES        PERCENT (3)
- --------------------                           ------    -----------    -------      ------        -----------
<S>                                         <C>          <C>            <C>          <C>           <C>
Visa Marketplace, Inc.                        259,067       *           143,927      115,140          *
Visa International Service Association        115,142       *           115,142           --          --
Michael Burmeister-Brown                       21,062       *            21,062           --          --
</TABLE>


- -----------------------
 *  Less than one percent
(1) Information with respect to beneficial ownership is based upon information
    obtained from the Company's transfer agent and certain of the Selling
    Shareholders.
(2) Assumes that each Selling Shareholder will sell all of the Shares set forth
    above under "Shares Offered."  There can be no assurance that the Selling
    Shareholders will sell all or any of the Shares offered hereunder.
(3) Based on 28,597,274 shares outstanding as of July 31, 1997.


                                       18


<PAGE>

                   ISSUANCE OF COMMON STOCK TO SELLING SHAREHOLDERS
                                           
    On July 29, 1997, the Company issued an aggregate of 466,321 shares of 
Common Stock to Visa Marketplace, Inc. ("Visa") and Sterling Payot Capital, 
L.P. ("Sterling Payot") pursuant to a Restructuring Agreement (the 
"Restructuring Agreement") among the Company, Visa, Sterling Payot, Visa 
International Service Association and Sterling Payot Company.  In addition, 
on July 31, 1997, the Company issued an aggregate of 24,778 shares of Common 
Stock to  Michael Burmeister-Brown pursuant to a Stock Purchase Agreement 
(the "Stock Purchase Agreement") among the Company, NetControls, Inc. and 
Michael Burmeister-Brown. Under the terms of the Stock Purchase Agreement, 
the Company acquired all of the shares of NetControls, Inc. in exchange for 
such shares of Yahoo! Common Stock. NetControls has had no significant 
operations to date.

                                 PLAN OF DISTRIBUTION
                                           
    Shares of Common Stock covered hereby may be offered and sold from time 
to time by the Selling Shareholders.  The Selling Shareholders will act 
independently of the Company in making decisions with respect to the timing, 
manner and size of each sale.  The Selling Shareholders may sell the Shares 
being offered hereby: (i) on The Nasdaq National Market, or otherwise at 
prices and at terms then prevailing or at prices related to the then current 
market price; or (ii) in private sales at negotiated prices directly or 
through a broker or brokers, who may act as agent or as principal or by a 
combination of such methods of sale.  The Selling Shareholders and any 
underwriter, dealer or agent who participate in the distribution of such 
shares may be deemed to be "underwriters" under the Securities Act, and any 
discount, commission or concession received by such persons might be deemed 
to be an underwriting discount or commission under the Securities Act.  The 
Company has agreed to indemnify the Selling Shareholders against certain 
liabilities arising under the Securities Act.

    Any broker-dealer participating in such transactions as agent may receive 
commissions from the Selling Shareholders (and, if acting as agent for the 
purchaser of such shares, from such purchaser).  Usual and customary 
brokerage fees will be paid by the Selling Shareholders.  Broker-dealers may 
agree with the Selling Shareholders to sell a specified number of shares at a 
stipulated price per share, and, to the extent such a broker-dealer is unable 
to do so acting as agent for the Selling Shareholders, to purchase as 
principal any unsold shares at the price required to fulfill the 
broker-dealer commitment to the Selling Shareholders.  Broker-dealers who 
acquire shares as principal may thereafter resell such shares from time to 
time in transactions (which may involve crosses and block transactions and 
which may involve sales to and through other broker-dealers, including 
transactions of the nature described above) in the over-the-counter market, 
in negotiated transactions or by a combination of such methods of sale or 
otherwise at market prices prevailing at the time of sale or at negotiated 
prices, and in connection with such resales may pay to or receive from the 
purchasers of such shares commissions computed as described above.

    The Company has advised the Selling Shareholders that the 
anti-manipulation rules under the Exchange Act may apply to sales of Shares 
in the market and to the activities of the Selling Shareholders and their 
affiliates.  The Selling Shareholders have advised the Company that during 
such time as the Selling Shareholders may be engaged in the attempt to sell 
shares registered hereunder, they will:  (i) not engage in any stabilization 
activity in connection with any of the Company's securities; (ii) not bid for 
or purchase any of the Company's securities or any rights to acquire the 
Company's securities, or attempt to induce any person to purchase any of the 
Company's securities or rights to acquire the Company's securities other than 
as permitted under the Exchange Act; (iii) not effect any sale or 
distribution of the Shares until after the Prospectus shall have been 
appropriately amended or supplemented, if required, to set forth the terms 
thereof; and (iv) effect all sales of Shares in broker's transactions through 
broker-dealers acting as agents, in transactions directly with market makers 
or in privately negotiated transaction where no broker or other third party 
(other than the purchaser) is involved. 

    The Selling Shareholders may indemnify any broker-dealer that 
participates in transactions involving the sale of the shares against certain 
liabilities, including liabilities arising under the Securities Act.  Any 
commissions paid or any discounts or concessions allowed to any such 
broker-dealers, and any profits received on the resale of such shares, may be 
deemed to be underwriting discounts and commissions under the Securities Act 
if any such broker-dealers purchase shares as principal. 

    In order to comply with the securities laws of certain states, if
applicable, the Common Stock will be sold 


                                    19

<PAGE>

in such jurisdictions only through registered or licensed brokers or dealers. 
In addition, in certain states, the Common Stock may not be sold unless such 
shares have been registered or qualified for sale in the applicable state or 
an exemption from the registration or qualification requirement is available 
and is complied with. 

    The Company has agreed to maintain the effectiveness of this Registration 
Statement with respect to the shares of Common Stock offered hereunder by (i) 
Visa Marketplace, Inc. and Visa International Service Association, until the 
earlier of the sale of such shares or July 29, 1998 and (ii) Michael 
Burmeister-Brown, until the earlier of the sale of all such shares or thirty 
(30) days following the effectiveness of this Registration Statement.  No 
sales may be made pursuant to this Prospectus after such date unless the 
Company amends or supplements this Prospectus to indicate that it has agreed 
to extend such period of effectiveness.  With respect to the Shares offered 
by Visa Marketplace, Inc. and Visa International Service Association, the 
Company has agreed to use best efforts to ensure that such Selling 
Shareholders have at least five (5) trading days available to sell such 
shares prior to September 30, 1997 and has agreed to ensure that such Selling 
Shareholders shall have at least twenty (20) trading days available to sell 
such Shares during each calendar quarter from the effective date of this 
Registration Statement until July 29, 1998 (prorated for partial quarters). 
There can be no assurance that the Selling Shareholders will sell all or any 
of the shares of Common Stock offered hereunder.

                                    LEGAL MATTERS
                                           
    The validity of the shares of Common Stock offered hereby will be passed 
upon by Venture Law Group, A Professional Corporation, Menlo Park, 
California, counsel to the Company.  As of August 6, 1997, certain attorneys 
of Venture Law Group owned in the aggregate 2,100 shares of Common Stock of 
Yahoo!.

                                       EXPERTS
                                           
    The consolidated financial statements incorporated in this Prospectus by 
reference to the Annual Report on Form 10-K for the year ended December 31, 
1996 have been so incorporated in reliance on the report of Price Waterhouse 
LLP, independent accountants, given on the authority of said firm as experts 
in auditing and accountancy.



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