Masahiro Inoue – President and CEO Kentarou Kawabe – President and CEO, GyaO!

Yoneshima – Barclays Securities Nema – Morgan Stanley Tomimatsu – Merrill Lynch Securities Araki – Mitsubishi UFJ, Morgan Stanley Securities Hayakawa – Credit Suisse Maruyama – Nomura Securities Vega [ph] – Mitsubishi Research Center

Thank you very much for waiting. We would like to now start the meeting to announce the third quarter business results of the Yahoo Japan Corporation.

In front of you, I think you have the [inaudible] as far as the presentation material and the trend of the profit and loss statement. And one announcement talks about the dividend.

And also, in relation to BB Mobile Corporation, this is related to the sale of the preferred shares back to the SOFTBANK. And we also have a sheet of survey or questionnaire included in our package.

We have about 30 minutes to make the presentation based upon the presentation material. I would like to ask Mr.

Inoue to start.

Thank you very much for coming. First of all, about the third quarter highlights.

This time, the research business and NewsWatch were sold, so they were excluded from the consolidated company. And because of that, the revenue came down.

However, e-commerce and advertising, we have done very well in the third quarter. Revenues and income, both of them were at record high.

The revenue was 75 billion Yen compared with the previous year was the increase of 5.8%. Operating income and ordinary income 41.1 billion Yen and 41.3 billion Yen respectively, 13% increase, 13.6% increase respectively.

Quarter and net income was 24.7 billion Yen. That is an increase of 18.4% year-on-year.

This is the break down. I’m starting with the Media Business.

First of all, the listing advertising. The travel related and mail order related companies expanded the advertising and also the cosmetic related, Internet information service related companies increased the advertising.

In the previous meeting, probably I mentioned this, but the quality of the advertising we have been trying to improve the quality. And we said that we would do many things to improve the quality, and because of that, there was a downward pressure on the revenue.

But despite that, we increased the revenue as a whole. High-quality advertising is important and also that led to the higher revenues, so the result was quite good heavily.

The smartphone is increasing in terms of the number of units and this was seen as an impact on the listing advertising. As for the display advertising, it was very strong as well.

We increased the price. Probably this contributed to some extent.

But rather than that, the advertisers were very enthusiastic about advertising, so I believe that was the major reason behind the increase of display advertising revenue. Brand panel targeting advertising for the mobile and the smartphones, all of them were very strong.

The Media Business as a whole, as you see, the revenue was 28.1 billion Yen that is an increase of 9% year-on-year. Operating income was 15.4 billion Yen, 24.5% increase year-on-year.

Turning to BS Business, for the small, medium sized companies mainly, you have our listing advertisings through online order, and this was also very strong. And the details are shown there, we conducted the seminars and we had the online agencies which grew in numbers steadily.

And here again, we try to improve the quality of the pages and size, and this had some negative impact. But overcoming that, we increased our revenue.

Datacenter related revenues, IDC was acquired, and with that the cloud computing related revenues or the related businesses are something that we are working on. And the revenue from that has increased steadily.

Information listing revenues, real estate and Rikunabi area, after the collapse of the Lehman Brothers, those were affected the most, and the last year we struggled in this business area. But starting from the previous quarter as we mentioned the decline has bottomed out and stopped, and gradually we started to see the recovery.

It’s not the quick recovery, but we are seeing recoveries, so revenue has increased as a result. The revenues 19.2 billion Yen, that is an increase of 8.9% year-on-year.

Operating income was 9.5 billion Yen, 19.4% increase year-on-year. Next is Consumer Business.

First, e-commerce related revenues. Shopping was strong.

There were tie-ups and other alliances. As we informed you, T Point tie-up and ZOZOTOWN tie-up were done.

And the quarterly transaction increased more than 20% year-on-year basis, so it was very good results. For auctions, slowly it was declining and some people were concerned.

But here again, the transaction value was almost flat, and I think that we are hitting the bottom of this. And here again, the transaction through smartphone is increasing greatly.

And our non-product sales; that is the digital content distribution and sales, especially games, the new services are very strong, so digital content revenue is on the rise. The premium membership is at the record high of 7.68 million IDs were achieved.

Revenue of this segment was 27.5 billion Yen that is an increase of 1.1% year-on-year. Operating income was 18.1 billion Yen, 1.1% increase year-on-year.

Turning to game business, tie-up with SQUARE ENIX and also the DeNA, we have partnerships with them. For each one of them, we are doing very well.

With the SQUARE ENIX, we have Sengoku IXA, this is the only title that we have. But it’s a paid service and many people are paid users, and therefore this has had a positive impact on the revenue side.

And from now on, we would try to increase the number of the titles and that is something that we are discussing with to partners. With the DeNA, partnership is going well, and we are increasing the number of titles.

Here, the number of the users has exceeded 2 million. And relatively speaking, compared the SQUARE ENIX, this is lighter games, and there are some paid users, and the number of the paid users are increasing, so both of them are contributing to the revenue.

So we are trying to increase this as a business, and we believe that we will be able to do so. As a new service, that is Yahoo!

Local, here today we made the announcement of this Yahoo! Local.

And as a pillar of the future growth of Yahoo!, we’re planning to improve the regional information service, and we have said that since sometime ago. And this is a specific example of the service that we will be offering in the regional information service area.

Until now, we have had this type of service, about the restaurants and maps and transit and coupons and so forth, but a lot of those were offered one by one. So instead we would like to combine them and provide at a comprehensive service as Yahoo!

Local, so that it will be easier to use. So that would be the basis for this idea.

So this is the regional information service. So those regional businesses or the outlets and stores and restaurants; as you see on the left hand side, you can see the actual services listed, and in each local areas the local service providers and restaurants.

And also on the right hand side, we have users, so we would try to provide those services to the users. So through the Internet or through Yahoo!

Local, we would like to link other local retailers and users in this service. And this service will be very localized, so PC, smartphone and mobile will be devices that will be handling Yahoo!

Local. And in the future, mobile and smartphones will be the mainstream interest of the device to leverage on this service most probably.

And we plan to actually launch this service as of April. And in terms of the announcement vis-à-vis the business sector, we would like to make the announcement earlier than April, so that we will be able to disseminate this information to the business segment and sales activities will start accordingly, and we will be launching this service in April.

Now let’s talk about smartphones. I have been mentioning that smartphones usages are increasing very rapidly in different segments.

Comparing with about a year-ago, the degree of usage is increasing by seven fold, and this is a very rapid growth. In terms of monetization, as compared to last year, we haven’t really started back in January of 2009, so we cannot have an apple-to-apple comparison.

But nonetheless in terms of the usage as revenue, we are seeing a very rapid expansion. In terms of the PC booming, it is very large within Yahoo!’

s business as a whole. And so in terms of total ratio amongst our business it is still small.

But in terms of the group rate, we are seeing a very rapid growth. Therefore, we can say that smartphone will indeed become the important segment of our business.

We have smartphones and we have iPad, and we have TV, which are non-PC. And we will like to pursue Yahoo!

Everywhere concept as I have mentioned before. And as you can see on this slide, there are different types of services that we can provide by different devices.

There are differences in gadgets and different services that can be optimal for different devices. And, of course, we have to fine tune different services, and we hope that we will be able to really leverage on the uniqueness of each device and come up with the optimal service for that very device.

Now, let’s look at the numbers. Three months ago, we have given you the forecast for the third quarter and what is the actual figure as compared to the forecast.

As far as the third quarter is concerned, from revenue to our income it out did our forecast. In terms of revenue, it is about the same as the forecast.

But in terms of the actual forecast of operating income, ordinary income, and particular our quarterly net income, we out did our forecast. The revenue actually out did the forecast and that was the contributing factor.

And also in terms of expense, we were able to put it under control. And those two are the major contributing factors in which we were able to out do the quarterly net income.

Revenue wise it was 75.1 billion Yen to 75 billion Yen, but we did more than a little bit above 75 billion Yen. And in terms of operating income, it was 37.7 billion Yen to 40 billion Yen, but in actual it was 41.1 billion Yen; ordinary income wise, our forecast was 37.6 billion Yen to 39.9 billion Yen, and the actual number was 41.3 billion; and quarterly net income forecast was, it was 21.7 billion Yen to 23.1 billion Yen, but we did 24.7 billion Yen.

So these numbers tell the third quarter was a very good quarter for us. Now, what is our outlook for the fourth quarter?

This slide tells the story. Starting from advertisement; ever since Lehman shock, the Japanese economy shrunk temporarily.

Of course, it depends from one company to another, but all-in-all we can see some aggressiveness, and industry as a whole is becoming very positive, and that is the impression that we see in the third quarter. And, likewise, we will be enjoying that momentum in the fourth quarter.

And so most probably we will be able to enjoy a good business in the fourth quarter as well. And we will like to actually be on par with the aggressiveness of the industry as a whole and try to ride that wave.

In terms of revenue, I believe that the forecast will be between 73.4 billion Yen to 77.2 billion Yen; operating income wise, between 39.1 billion Yen to 41.4 billion Yen; ordinary income wise 39.2 billion Yen to 41.5 billion Yen; and net income wise 23.1 billion Yen to 24.5 billion Yen. And this is our forecast.

And so if you add the actual to the forecast, you can see that in terms of a total year what will be the number. In terms of the revenue, it will be between 290 billion Yen to 293.8 billion Yen.

Operating income a 156.3 billion Yen to 158.6 billion Yen, ordinary income 156.7 billion Yen to 159.0 billion Yen, net income wise 90.9 billion Yen to 92.3 billion Yen. We believe that this will be the forecast for the entire year.

This is the record high for each item, and we are sure that we will be able to attain that level. And, of course, we will put our full efforts to achieve this end.

And there are several slides, and we do have graphs that that will be self explanatory, and so please look at those slides at your leisure. So, now, I will like to open the floor for question and answer.

If you have any question, please raise your hand.

Yoneshima from Barclays Securities. I would like to clarify some points on the numbers.

On page 18, Media Business revenue 28.5 billion Yen, and display, and the search, and your agencies are – this is included. So could you talk about the break down the display and the search related?

So are the break down of the search and display is what I would like to know. Display advertising and search advertising compared with the previous year and also – or year-on-year increase and quarter-to-quarter increase is another question that I have.

The second question, in the forecast, the fourth quarter forecast was mentioned. Yes, fourth quarter.

Based upon the result of the third quarter, just above its range, so if you look at the growth number probably it will be clear, probably you are a little too – a little conservative in this forecast number, especially the operating income number, the sales promotion and others are included, and also the payment to the Google probably was included. And because of that you were conservative in coming up with the forecast.

That’s one point of clarification. The third point, I would like to ask is in relation to smartphones.

Page view is increasing. Sure that’s a graph.

For you the transfer or migration to the smartphone or change from the feature phone to the smartphone, do you think that is migration shift is positive for you, positive impact for you? Especially in the case of mobile phones if I may say, you cannot win or – win out of advertising.

So in the case of smartphones, you would have more opportunities to have advertising and more space. So do you think that the smartphone with the penetration of the smartphone in Japan, that will be the positive factor for you?

The last point, if I may, or fourth question is about the BB Mobile, 120 billion Yen the sale of this back to SOFTBANK. Is this cash or this will be cash payment 220 billion Yen?

So is there a particular purpose of using this investment or some other purposes of using this 120 billion Yen that you receive?

Thank you. About advertising, it’s the usual break down, so I would like to briefly go through it.

Out of the total, display and listing is two categories. The percentage of the listing is about 60% – well previously it was 70% or so, it was a little low end of that, because it is pretty much strong.

So probably two-thirds were listing and one-third is display advertising. So if you calculate backwards you will be able to get what you want.

And year-on-year and quarter-on-quarter growth, as far as display, is about – on year-on-year basis, 13%, 14% growth. Display compared with the second quarter, the third quarter was very strong.

And so on the quarter-to-quarter 14% to 15% growth. Listing year-on-year growth was 15% to 16%.

On quarter-to-quarter, 3% or so. So listing part, non-YJ that is the partner sites.

Part of the partner sites had the arbitrage, that is to say that their SS advertising or it was kind of a deviation from the original SS advertising, and we stopped such arbitrage type. So in the third quarter, we tried to eliminate that with the understanding of the partners.

So that portion was a little negative growth quarter-to-quarter. So because of that, the quarter-to-quarter growth was weaker.

About the forecast of the fourth quarter, on the year-on-year basis, of course there was a range. But the momentum of the third quarter, we’d like to continue with that momentum.

But as probably you remember, the fourth quarter last year, after the collapse of the Lehman Brothers, and we were wondering about what would happen in 2009, and at that budget, the advertisers were conservatively coming up with the budget. And in the fourth quarter, they tried to consume the remaining budget where they turned more aggressive, especially that led to the higher revenue of the display.

So similar type of growth whether that would happen in the coming fourth quarter or not, that is still something that we will find out. But we are not too conservative but we are moderate in coming up with this revenue forecast.

Usually commerce, or auction, shopping in the third quarter, usually it’s the peak in the third quarter. So the fourth quarter we try to maintain that, but it usually comes down.

So based on that, maybe we are moderate or conservative, but it doesn’t mean that that there will be any major change. Thus for the income number, profit number, the third quarter, maybe there would be some additional question, but the sales promotion, advertising, if you look at the second half of the presentation material, you will find some information.

But we have been quite aggressive in spending in the sales promotion. So fourth quarter in the various areas, the search, advertising, and e-commerce, and shopping, and auction, and we continue to be strong.

And also the game has been very strong. So for the promotions of those businesses, we will continue to be positive and aggressive in spending.

So based upon the possibility that we will spend more the income is not going to grow so much. So that is incorporated into our forecast.

As for the payment to Google, that is not going to increase significantly, so it’s not one of the reasons behind the lower growth of the income. Regarding the dissemination of smartphone, I believe that it will obviously be a positive impact to Yahoo!’

s business. But in terms of the differentiation of smartphone and non-smartphone, of course there are different usages, we have PCs, we have mobiles and smartphones.

And I believe that there will be increase in the number of users in each area. And so in terms of feature phones and other non-smartphone devices, I do not think that the smartphone is the only winner, but there will be other increases in other segments as well.

And so with more gadgets around, I am sure that there will be more usage of the Internet, and GyaO! and itself will positively to Yahoo!

as a whole. And in terms of smartphone in particular, other than SOFTBANK we have Galaxy and other devices which are not open per se, but rather they have closed data service.

And some of them possibly are on the Internet, and I think that is the scenario that is evolving. But in terms of smartphone, it is open.

And from day one, access to the Internet is accommodated, and that is how smartphones are being designed. So Yahoo!

leverages on the open Internet. Therefore, the users will be able to access Yahoo!

more readily by leveraging on smartphone, so that will add positively to our business. And going to the fourth question related to the preferred shares 120 billion Yen, we have preferred shares.

And in April of 2013, we will get the interest of 12%. And realistically speaking, that will be the timing of redemption.

But since it is in the form of preferred shares, there is no guarantee. And Vodafone and other related companies conduct a discussion about how we are going to handle these preferred shares.

And we decided to accept the sales of the preferred shares and we believe that we can get cash out from preferred shares by selling the shares, we will be able to leverage on that cash, and on top of that we will be able to calculate what is the actual value of the preferred shares that we have. And in terms of 120 billion Yen, once we invested in the BB Mobile, we will be able to put this cash to usage at the time as was needed.

And in terms of a sale date, it will happen this month. But in terms of the payment, it will not happen until March of 2013.

And so this will be a crude amount that will be in our hand later on, not right off the bag. And so we will get the interest accordingly.

And so this time around, we decided to agree with selling our preferred shares and that’s the content of the deal. And when we come close to March of 2013, we would like to decide how we are going to use this 120 billion Yen.

Thank you. Any other question.

Thank you for the presentation. Nema from Morgan Stanley.

I have two questions. First is in relation to Google.

After switching to Google engine, for example query or click through or unit price, do you have anything visible, something – some visible changes? And gross profit or cost of sales has come down.

Is this because of the switch to Google engine? That’s my first question.

The second point is about games. Some numbers were shared; page seven, users 2 million with SQUARE ENIX Sengoku IXA is 400,000 or 0.4 million.

If possible, the ARPU and the percentage of the paid customers and paid items, could you share with us those numbers?

Well, switching to Google engine, after that the major change of KPI was your first question. Probably I talked about this before, but for each keyword there are differences.

For certain type of keywords there are some differences. And we try not to have many differences, not too much differences, we have taken time to replace gradually.

So because of that, after the migration was switched, there have been no major changes, differences, especially no changes that you need to be concerned about. As for the cost of sales, yes cost on year-on-year basis, it’s down.

But actually at the impact of the change to Google is not so large. Every year this is something that happens, that is especially to Yahoo!

Inc. in relation to search, repay fee to the Yahoo!

Inc., and the percentage last year and this year have changed to certain percentage point down. So revenue is up, therefore, actually that is quite a big number, because it’s based on the revenue number.

And with the revenue, the [inaudible] was down. And after the switch to Google engine, performance fee is something that we pay to Google, and that also pushed down.

But actually the decrease was higher than the increase. And Yahoo!

value inside we transfer that to MACROMILL and so NewsWatch shares were sold. So they are unconsolidated or deconsolidated.

So those two businesses, that actually had high costs. So that portion was taken away from the consolidated numbers.

So this probably was two-thirds of the overall reduction. And probably two quarters ago, there was an excessive attack in relation to the partners.

And last year we had that portion, but not this year. So all of those factors, and because of this the cost came down by about 1.5 billion Yen or 1.6 billion Yen.

As for games, since they are partners, we cannot really say whatever we want. But the feeling is that 400,000 by one title is quite high as a number.

400,000, sorry. And with the SQUARE ENIX, the browser Sangokushi they tried and this is the second title.

And based on the previous experiences how to charge the gamers, they found out that what would be – know how to try to monetize this. So this time as a business, I think it’s going very well.

The paid services, we have made it possible so that the page services can be utilized more. As for DeNA, recently or as the age of the gamers increase, we thought that the PC will lead to the higher ARPU, so that was our hope, or their hope that they started with this service.

But actually we don’t know whether this was because of the age of the users or the games, but the – we are getting close to what we expected in terms of the paid services and billing – the rate of billing. So this is something that we just started.

I believe that we can improve this. But at the beginning I think we are – we have made a good start or smoother start.

Thank you. Any other question.

Person sitting at the back.

Hi, I am Tomimatsu from Merrill Lynch Securities. I have four questions altogether.

But first of all, it is about BB Mobile. I want to confirm one point.

In terms of SOFTBANK Mobile such as featured phone oriented services, you are not going to make any changes, say in terms of the business with other carriers are you going to be more flexible, and do you plan to make for the expansion? And I want to compare whether my understanding is correct or not, and I want to know what is the impact of this preferred shares sale.

Second question, in terms of smartphone, in your slide you said that you will be having a many applications for iPhone and Android. And regarding services, I will like to hear your view regarding the browser based and application-based users.

And what do you think will be the future usage pattern and what kind of impact that will have on the Yahoo!’ s business?

You mentioned about the Yahoo! Local, you mentioned – and they reconciled addition different services.

And may be it might be difficult to consolidate the applications, but will more or less browser-based service rather than application-based service. So I want to know what is your view about the smartphone-based business and what will impact the business of Yahoo!, and what is the role of smartphones and also Yahoo!

Local? Well, next question is related to Google.

And the search engine is very multifunction. And you are not going to change the total platform to Google, but say they are social or blog related part of Google that you are not leveraging on.

And there are some sections that you do not leverage on Google to date, but there will be more diversities in search. And how do you plan to accommodate the areas that are not covered by Google to date that you plan to conduct development by yourself, or do you augment and to actually work with Google, or since Google have more budget for development, do you think your effort will payout vis-à-vis Google?

Another question is related to the income of Q4. And it seems that you are budgeting much of cost or expenses.

And in terms of the expenses, I guess you plan to increase your capital investment, because you are enjoying high revenue. But in the guidance given in Q3, it seems that you did not use much capital in different expenditure areas and you have initial CapEx and you have another CapEx that you planned to conduct in Q4.

Do you think the content of the expenditure for Q3 and Q4 is different? And, if so, what is the difference in your attitude or stance vis-à-vis of expenses?

Firstly, let’s talk about BBM, the decision we made regarding our preferred shares. You want to ask whether there is any business changes or not.

There is no business change whatsoever as mentioned by Mr. Kajikawa.

Initially, we bought our preferred shares for [inaudible] and we were able to achieve that. And on top of that, we have daily activities that we will be conducting in the mobile area.

And of course we will continue putting our effort. And in terms of our business with other carriers, there has not been any constraint so far.

Having said that we will want to make multiple proposals in the future to carve vis-à-vis other operators as well. And, but, unfortunately there we were not able to strike a very good partnership agreement with other carriers.

And, but, we will continue our effort and provide aggressive proposals to other carriers as well. Now regarding smartphone, it will become more prevalent, and via different applications, smartphone will be used and browsers might be launched via the browser, the Internet service will be used.

Those are two scenarios altogether category wise. And I believe that both scenarios are quite feasible and realistic, and it all depends on the individual preference.

And long-term perspective wise, maybe I believe that everything will be consolidated on a browser. When you think about the history of PC, each vendor had different PCs, and their users that had PC, they can operate XYZ application or XYZ communication, and that was one stage in which people competed in that arena, and that happened about 30 years ago.

And IBM, P-CAD [ph] came into the world and that became the standard. And, therefore, that was not a differentiating factor no matter what PC you use, any applications run over the PC.

And now with the advent of the Internet, the PC went through yet another stage of evolution. During that time, the application did not have to necessarily reside on the PC.

Via the browser, you can use it through the Internet. And so the usage pattern of PCs changed with the advent of the Internet.

And this is the historical background of PC. So in smartphone and Pad, you have to download application or you have to purchase applications.

And that’s how people use applications, and maybe that’s the mystery. And in terms of the usage of the Internet via the browser, maybe that might not be the mainstream, but say there will be many more browsers and maybe you cannot download everything.

And if that’s the case, maybe you use the Internet and you search different items via Yahoo!, and maybe that might be the new world. But we need some time to realize that world.

At least that’s my personal view. And what is Yahoo!

about the two. Well, we will pursue both applications as well as browsers.

And so today, Yahoo! will put the same effort in both arenas.

Now, about the Google search engine and how we differentiate ourselves, one other services we do not leverage from Google, Google has partnership or contract without the entity. And depending on the agreement, Google cannot provide their service to the third party, that’s the kind of service that we cannot use from Google.

And then what will Yahoo! do?

Google has partnership and we can have individual contract with that entity, and we will be able to provide the same level of service, that’s the basic policy that we will abide by. When we announced the partnership with Google, we mentioned that the web search ratio wise is declining, and you can see that in the result page search.

And Yahoo! will put this on effort especially in Japan, especially in the Japanese language section, and so that we can be unique in these areas.

And in the end of the day, we will be able to attain distinct nature that is unique to Yahoo! So fourth question was I will ask him to answer.

How we look at cost? In the third quarter, we tried to invest in advertisement and sales promotion.

And we accumulated a budget for these two segments. And in the fourth quarter, from the very beginning of the quarter, advertisement and sales promotion expense wise and also different services, we will be more diversified in spending in these areas.

And, of course, there is some – announced in the third quarter, we increased, but in the end of the day maybe it doesn’t look that the figure went up dramatically. But in terms of the fourth quarter based in advertising as well as the promotional sales activities, we believe that we will be spending much in these areas.

Say in the third quarter, it was a much conspicuous, but we did not know what the top line figure will look like. During that time, we tried to look at what will be our revenue.

And in the course of the quarter, we tried to bid up on the budget. And initially we allocated some budget but we did not give the final goal at the very beginning of the quarter during the third quarter.

But in the fourth quarter, unless there is much difference in the revenue, we will look at different KPIs such as the premium membership number ID as well as the revenue. We will try to act according to the plan and spend accordingly.

And, of course, we have to see at the end of the quarter, but maybe we might have to cut some budget in some area. But we hope that we will be able to spend in the budgeted SGAs as scheduled.

Thank you. Any other question.

Araki from Mitsubishi UFJ, Morgan Stanley Securities. I have five questions.

The – I’d like to know the overall number, is it exceeding the 40 billion Yen or so of the advertising? As for the interest match among the – out of the listing, how much is the interest match?

Also interest match, Mr. Inoue, I think you started this and with the growth that you have achieved, I’m sure you went through many things.

But for example, the CPM type billing or display non-text incorporation, something like that probably is possible. But in comparison to the proper research it might be weaker.

So could you share with us your views? Also the targeting, what was the status in the third quarter?

And consumer products revenue, commerce related on quarter-on-quarter is 1.2 billion Yen increase, auction and shopping and bidding digital pay, the digital content. If you divide into those three, what were the contributions in terms of a percentage?

Also consumer, the operating income has increased only by 200 million Yen, so is it because of the cost that is spent for the shopping or paid digital content, could you share with us those? Also for the coming year, Yahoo!

Local is a – probably a key for you according to the newspaper, seems that you might have a surprising number internally. So at Local, of course, you have to see and to – before you answer, but you could talk about that?

In relation to advertising, I would like to first of all answer the advertising – overall advertising revenue. Whether it has exceeded 40 billion?

Yes. It has exceeded, so that’s my answer, thank you.

IM, percentage of IM in listing, I talked about overall listing is, I said two-thirds is listing out of the total advertising. And this portion or IM is about 5%, sorry, or out of the overall advertising is about 5%.

And the risk I believe is according to the targeting in terms of the product brand panel and in the Analyst Meeting we talk about this, and it’s – our brand panel is very strong. In the third quarter too especially at the end of the year is very strong.

So utilization rate or ARPU was higher than the last year, so that was good news. And, unlike last year, prime display in targeting the utilization rate was highest.

So in addition to brand panel, the prime display did well in the third quarter and targeting continue to be strong. Out of targeting, one of the characteristic is that, in the past, it was behavior targeting.

Behavior targeting was successful and that was growing, that was the only thing. But demographics targeting or area targeting are the ones that we also have.

Those are also very attractive and we kept saying that. In terms of growth, demographic and area are higher now.

Behavior targeting, there are some differences depending on the industries and it’s growing, it’s positive. But it is not the case that the targeting is the only growing part, there are other parts that are growing faster.

Another question about commerce, you want to breakdown quarter-on-quarter. The consumer – the inside of the commerce, when you look at the growth, digital content, the pay content, the games is a big one, the growth is very high because the beginning was very small.

Shopping, auction, and digital content for all of those settlement, net trust portion is – was also strong. So wallet settlement on the full I believe was the big part.

In terms of revenue, the values are little different. But auction and shopping growth on quarter-on-quarter was the very highest, so double-digit growth was achieved, service very strong I think, we can say that.

As far the operating income, as I said earlier, advertising, also promotion is EM, search, advertising and/or SEM, SEM type promotion. And the promotion for both auction and shopping, we had to budget to start with, and it was a peak time, so we had higher numbers and there were additional measures that we took.

So because of those operating income growth was weaker than what we expected. I believe that was all the questions.

As for the interest rest – interest match, sorry in the future, yes I continue to focus on that. Now we look back what we have done, there are areas that went well and other areas that didn’t go well, so we would like to continue with the good parts.

And there are some lessons that we learned, so for those we will take measures, so that we can provide enhanced products and services. Whether we use CPM, it’s not very clear.

But in addition to the text, for example using the video and make it more rich, that is something that we foresee for the future. In relation to Yahoo!

Local, I keep telling people that we wanted to be surprised. But unless we try, we don’t know that is my straightforward feeling.

Might be a big homerun or we might strikeout, that’s also possible. So I don’t think we should give out a lot of hot air.

That is my personality. So if it goes well, I think we want to be surprised together.

Thank you. Any other question?

Person sitting in the front.

I am Hayakawa of Credit Suisse. First of all, congratulations for your good track record.

For a decade I have been following your company, and I have one question. And it seems that you are showing good achievement one after the other.

And with that it seems that your profile as the Internet company is getting peeler and peeler. And so in terms of PE you are looking at a double figure and it seems that the better you do, your stock price will go up and [inaudible] is true.

So it is about a 30,000 Yen and that is the stable figure. And you have iPad and iPhones, and you see a multiple devices, and we have SNS, and you have different activities within the Internet.

And within that backdrop, what is your position of Yahoo!, what is the rule of Yahoo! within SOFTBANK Group, what is being sold for in your company?

And what is the future profile of your company? I am very much interested in that.

You have SOFTBANK Group and SOFTBANK is the major shareholder and what is being demanded of you? And in response to that, how do you plan to operate your company and what is your strategy?

So I would like to hear a big picture from you. So we see a big wave in the world of the Internet.

And amidst that, what is your undertaking and what is being demanded of you by your parent company? And also, I’m sure that more your share will go up in terms of – and in terms of PE it will be like 20 or 30 or 50 fold might be looked for.

And if you have to be a compared with other Internet company of the global player, what is the uniqueness of your company and what is being thought for?

Well, I guess your question consist of two components. Say, I guess that you feel – we are very unlike ordinary Internet company, then what is the difference of the Internet company vis-à-vis other industry companies?

Well, high growth rate and expectation of high growth might be the differentiating factor of the Internet company as compared to other industry players. When Yahoo!

just started its business everything was fine, but as we grew maybe we went beyond the size in which self imposed growth momentum is not sufficient, but we are so big that we might be engulfed by a big wave of the industry as a whole. So when the economy goes down, then our growth rate goes down accordingly.

And so having said that, smaller the better in a way. And so maybe if we actually spinoff our company into smaller components then we might look better, and probably we want to stay as a big company.

And the – we have to have the operational strength so that we will not be swooned or swallowed by the negative economic wave. And after the Lehman shock, I guess we have been negatively impacted all-in-all, and I do agree with that.

But fortunately, the economic environment is getting better and we are seeing recovery. And as long as there is a good momentum, I believe that we will be able to ride on the wave and enjoy growth.

So we have to be well prepared and so that when the next negative waves come we will be able to ride over that wave instead of being engulfed by that wave. But that compared to other Internet companies, I think we are growing.

But the bigger the number becomes, I guess when the number goes down slightly even then our company looks appeal amongst a backdrop. But please do understand our current situation.

Now, moving on to the second question, your second question pertains to what kind of role we are being sought for by our parent company. Well, when you looked at the SOFTBANK, long-term maybe you might be able to understand our situation better.

SOFTBANK does not actually demand anything concretely in a very concrete manner. And so in other words, SOFTBANK does not ask the subsidiary company to act in the way that SOFTBANK wants to, but rather we are giving a certain discretion to act in the way we want to.

But then even though we belong to the Group, we are not given any preferential treatment so to speak. And so it’s not set in such a manner that we are pampered.

Of course, if [inaudible], I’m sure that the parent company will look after us, but all-in-all we are not pampered. And so in terms of the subsidiary company within the Group, we are given the discretion of operating the company that we want to run.

And we are expected to grow, but that expectation is not defined in a box like manner. And so if you looked at SOFTBANK 10 years down the road, I’m sure that you will be able to understand the corporate culture.

And so the parent company, i.e. SOFTBANK does not have any pre-consumption of how the subsidiary company should act, but rather a parent company is looking for flexibility in changes and transition on the part of the subsidiary company.

Thank you. Any other question?

The person in the first row.

Maruyama from Nomura Securities. Some detailed question in relation to smartphones, you have had a quick startup.

I have three points. First of all, out of the advertising revenue, what is the percentage of mobile, if possible the percentage of smartphones?

Second point is this listing and display if it’s possible to separate those two, which one is bigger as of now? As for as the next year, both of them are going to grow quickly, so do you expect some changes in terms of the size?

The last point is on page nine, you have a graph. The number of access is growing.

It does not include application size. So as of now, browser base and application base, are there any differences between the two?

Mobile – out of the mobile overall advertising, it’s about 5%. That is usually what I say.

And this time the percentage because of the smartphone, contribution of the smartphone pushed out that number to the higher part of 6%. So how much is the smartphone?

It’s very small. So as it grows, I would like to make that comment.

The growth rate, for example, out of the total mobile, our total mobile growth say that is 20%, 30%, the smartphone portion is growing at the double speed. So in the case of smartphones, we don’t really have much space available for the display advertising.

Of course, it’s setting well, and we have a lot of a sold outs, but listing is the major part. So recently or in the next year, the listing growth is going to be the major contributor.

As for the applications, any one who can answer to that question, the browser, the percentage of the browser and application? The application page cannot be measured.

We don’t know. Well, we have indices available, because based on the same standard six times or seven times increase.

But we do not have very solid numbers, so because of that we don’t really share the numbers themselves. In the area of the applications, not possible to measure, so it’s very difficult to compare those two.

Thank you. Was that a good answer?

Do you have any supplementary comments?

Application, end browser.

So maybe next year we should be able to clarify that breakdown. Thank you.

Any other question? Person sitting out in the center.

I am Vega [ph] of Mitsubishi Research Center. I have two questions.

What is your take on China? And secondly, GyaO!, it did well in November, how about the future prospect?

Those are the two questions I want to pose to you.

Regarding China, well, we are in the second run in the base booking, and so it’s in the second innings so to speak. And we cannot tell you any rosy picture yet.

And we are trying to leave the ground for the future. Any view I think that is right.

Now GyaO! is putting its best effort.

Any comment from the floor? This is the comment from the staff members of Yahoo!

JAPAN.

I am Kawabe of GyaO!. The number of users of age is increasing.

In terms of net ratings of November, unique users is more than 60 million. And in November, in terms of YouTube, the number is not increasing, at GyaO!

we increased the number. And December wise we had TV commercial and other endeavors.

And we believe that there will be a more increase. And this year wise, we have some profit, so we are going to invest in the content and make the content more favorable so that we will enjoy more increase in the users.

How about the sales or revenue of GyaO!?

We were able to secure the revenue there. We expected and we are increasing our profit more and more.

And so, we can say that the GyaO!’ s business is growing steadily.

Thank you. Any other question?

Person sitting in the back.

[inaudible]. Operating profit is plus 13% and net profit is plus 18%, what is the difference between those two?

Well, non-operating income and extraordinary income 200 million Yen and 200 million Yen respectively, so total of 400 million Yen increased, and that is the major reason. For the non-operating that’s equity method, so equity method alleviates, business performance were relatively good.

As far as the extraordinary income, seven net when was that the change in equity method or is it because of the performance? The percentage of the equity method was changed, equity holding percentage was changed.

So that accounted for the gains from the change of the equity method. And because of that, net profit increase was better than the increase of operating income.

Hope that answers your question. Any other questions?

If not, we would like to end this session. Thank you very much for your participation.