Yahoo! Inc YHOO
Q4 2011 Earnings Call Transcript

Operator: Doug Anmuth, JPMorgan.

Doug Anmuth - JPMorgan: Two things. First, can you guys talk a little about the interclick contribution that you're looking for, for 1Q just in terms of revenue and then also operating income and also maybe provide some color on how you're thinking about it for 2012? Then just a question on Search RPS improvements, can you give some sense of where you currently are? Microsoft made some comments about improvements there during the quarter and perhaps relative to the guaranty levels which you have in place? Thanks.

Timothy R. Morse - CFO: Sure, Doug, this is Tim. So, on interclick impact on Q1 as I noted in the script, there is about $25 million of cost in there. There is a little bit more than $10 million of revenue in there. So, therefore there is a little bit of loss and 1.5 point impact on our operating margin rates. That we expect to continue to ramp and ramp healthily throughout the year, we've got big plans for that acquisition. As I noted back on the October call, it really still in a piece of our market presence in the non-guaranteed space, that's important to our growth. On your second question, RPS gains in the fourth quarter, nice job I would say by Microsoft. I also noted our sales force, I think is starting to now get in the swing of things, would be able to go in the offense of a little bit there. On the technology side, with Microsoft simple mutations, we saw some good RPS improvements as I said in the script, mid to high single-digits versus last year and versus last quarter. So, we're definitely closing the gap. The guaranty is getting smaller obviously. I don't think it makes a whole lot of sense to go into kind of play by play improvements there, because the guarantee covers us through March 2013. But as I did note, I think the progress we made across a wide variety of areas for the Search Alliance in fourth quarter was definitely the best we've seen.

Operator: Spencer Wang, Credit Suisse.

Spencer Wang - Credit Suisse: Scott, I just wanted to come back to your comment about operating the business in a balanced fashion. How significant of a role do you see M&A in terms of the go forward strategy? Do you see the need for any transformative on acquisitions? Then, secondly, if I could for Tim; Tim, can you just give us a little bit more color on what you're seeing with respect to the macro environment in the first quarter, especially in Western Europe?

Scott Thompson - CEO: Regarding M&A as we defined our forward-looking strategy for the business, I suspect that there will be places where we don't have the technology today or the capability today and if we want to push his agenda forward quickly, we will have to be fairly aggressive in the market. Now as with any acquisition, we will be very, very disciplined to make certain that we're getting the right pieces to fill in, but I am relatively certain here that there will be things that will interest us and as we said, we will fill in technology gaps that we might have today.

Timothy R. Morse - CFO: Then Spencer, on the 1Q macro, really very early to tell. As you heard me say earlier, Europe was the chief driver of probably $10 million or so of macro economic weakness we saw in fourth quarter. Early indications are its no better, off to a little bit of a slow start in the first quarter, but maybe over the last week again, it's early, maybe ramping up a little bit, but still tough to look out. There are so many factors at play, especially with the European Union, tough to look out and extrapolate too much, but I would say we're not expecting much of a pickup in the first quarter and anywhere really. I think probably a continuation of the environment that we saw everywhere in fourth quarter.