Masahiro Inoue – President and CEO

Keiichi Yoneshima – Barclays Securities Yosuke Tomimatsu – Merrill Lynch Securities Takayoshi Koike – Goldman Sachs Atsuo Takahashi – Mizuho Securities Yuko Maruyama – Nomura Securities Masato Araki – Mitsubishi UFJ Morgan Stanley

[Interpreted] Thank you very much. At this time, we are talking about the fourth as well as the full year and these are the financial data.

Sales ¥292.4 billion, that is 4.5% increase year-on-year; operating income ¥159.6 billion, 11% increase year-on-year; ordinary income ¥160.2 billion, 11.8% increase; net income ¥92.1 billion, 10.4% increase, so all of those numbers increased year-on-year. As an overall summary, as you see on this page, the FY 2009, after the collapse of the Lehman Brothers, we were impacted by the recession and advertising had been weak.

But 2010, if you look at the full year, we started to see the quick recovery from the bottom. And as you know, the research company was transferred, research business, to MACROMILL – transferred to MACROMILL, so now it’s under equity method.

So, the sales, including that decrease, increased only by 4.5% but the profit or income increased more than 10%. So, for the 14th consecutive year, both sales and profit were record high.

I’d like to talk about the brief summary of each segment. The Media business, as I mentioned, advertising sales rose steadily.

BS business, the listing advertising particularly for the small customers grew, and also in 2009 the recruitment information listing revenue was down but it has recovered. As for Consumer, the shopping related, also the digital content, especially games, steadily increased in revenue; however, auction is still a little weak.

The numbers, I think, are shown here and advertising was very strong and because of this Media business has increased (inaudible) more than 7%. What about fourth quarter?

Again, the listing display increased mainly. Revenue, ¥75.7 billion; operating income, ¥42.3 billion; ordinary income, ¥42.7 billion; quarterly net income, ¥24.3 billion, so 3.5%, 9.5%, 10.4%, 4.3% increase respectively, and revenue profit hit a record high.

Looking at the Media business, in the fourth quarter, as I mentioned already, the advertising was strong. Also for the mobile phones, advertising has been increasing.

On the 11th of March, there was a major earthquake and if you look at the fourth quarter results, we were impacted by it, and for each business segment, what kind of impact we had are summarized here. In Media business, there were self-restraint that is the suspension of the advertising we also had that at Yahoo!

and during that time the advertising revenue was down to zero because of the suspension of advertising. And also, the users’ activities have changed during this time, so the click on the advertising was reduced, and they just went directly to the information that they wanted to see.

So that type of usage was more prevalent after the earthquake, so the click – the number of the clicks declined and the revenue from that was reduced. Sales revenue was ¥30 billion, operating income ¥16.5 billion, each of those increased.

So it was not bad, but without the earthquake, probably the fourth quarter was very strong quarter. Looking at the display advertising, the suspension of the advertising was the major element.

The smartphones has been increasing and the GyaO for the full-year, for the first time, generated profit. So, this was one of the reasons why display advertising increased.

And the impact from the earthquake, as you see here, is same as I mentioned before. As for BS business, listing advertising was impacted and data center related revenues.

Now there is migration was shift to cloud, because of the business structural change is progressing, so the collocation business, renting the space, is lower in terms of the value-add. But in the case of the cloud-type services, there would be additional services that we can offer, so it is better in terms of the business structure.

So that kind of business is expanding. As for the real estate and also the recruitment information, we saw recovery and impact from the earthquake for this business from the small medium-sized businesses we receive revenue that is a part of this BS business.

So the earthquake-hit areas, we have some customers in those areas and sometimes, we were not sure whether we could provide services, or we stop the charges to those some of the customers and some other majors, so those affected, or influenced, some of the revenue numbers. But in the case of data center related revenues, especially after the earthquake, outside of Kanto area, there has been a lot of inquires about the data center outside of Kanto area.

But as for the fourth quarter, this has not yet turned into the sales, but we expect that this would happen in the future. So sales revenue, ¥19.9 billion; operating income, ¥10.6 billion, and 6.7%, 16.2% increase year-on-year.

Consumer business; e-commerce related business, the sales promotion as for the – before the earthquake, we had a lot of sales promotion activities. Premium members have increased and we were impacted from the earthquake, the logistic distribution was confused after the earthquake.

So e-commerce, from where can we deliver goods, or which merchants managed to continue the business; there were some confusions, so there were some difficulties, but I think many of those have improved. As for the sales promotion campaigns, Yahoo!

Shopping, we have had practiced self-restraint. So the promotion cost, although we included that in the budget, some of them was not utilized.

So in the short-term, this pushed up our profit or income numbers, the revenue ¥25.7 billion, operating income ¥15.6 billion, it’s a slightly negative change year-on-year. Yahoo!

is the Internet service provider. So after the event of the earthquake disaster, we took different countermeasures, and those countermeasures are written on the following lists.

What kind of services did we provide? Those are listed over here.

Basically speaking, on the day of March 11th, we came up with the emergency structure and 24 hours a day, we provided different services. Page view wise, it grew dramatically as well.

We had different information for the victims and also, we had different support to provide relief to the victims. So from different angles, we provided services.

Also, we came up with a fund/donation structure. We came up with Yahoo!

Charity Fund, and in six days, we were able to gather more than ¥10 billion. And so, from their initial point, we started the charity program and so we were able to provide donations and so we have about ¥1.4 billion to date.

We used the Internet to collect donations and it has its own citizenship amongst the Japanese public now. And so, other than Internet-based donation, we conducted different programs as well.

And I’m sure that this kind of trend is becoming very conspicuous. In terms of Internet portals, what is its creditability, as well as its value?

We believe that we were able to further enhance those aspects of portals. And as a service provider, we are very happy to see this new trend.

Internet is becoming more important and its creditability is becoming very important as well, so it is on par with TV. 15 years ago, we started Yahoo!

Services, and during that time, we were not able to imagine and the Internet portals gaining such citizenship among the Japanese public, but I’m very happy and honored to see such an enhancement in the positioning of Internet portals. Instead of conducting monthly disclosure of the numbers, we decided to provide quarterly disclosure.

Maybe you might have some questions as to why we made such a decision. And there are some monthly fluctuations, but we believe that those monthly fluctuations do not have much meaning in the total landscape.

So in terms of the co-relationship with earnings, the disclosure figure does not have a high co-relationship and those monthly changes indicators are only marginally affecting the business trends. Therefore, in line with the quarterly performance presentation, we will be disclosing (inaudible) numbers.

The statistical figures that are listed over here will be disclosed on a quarterly basis from here onward. In terms of the content of the numbers to be disclosed, we do not see much differences.

Three months ago, we came up with the outlook and we can actually compare the outlook with the actual figures of the fourth quarter. This is the review page, and in terms of the revenue it was between ¥73.4 billion to ¥77.2 billion and actually it was ¥75.7 billion.

And so we were within in the range of our forecast. On the other hand, in terms of the income, in terms of operating ordinary as well as quarterly net income, we outdid the forecasted range.

As mentioned before, we were planning to conduct different sales promotions and campaigns for the year-end but we did not execute on those plans, therefore you see an increasing number. And also in January, February and up until the 10th of March, we were doing very well during the fourth quarter.

But the last 20 days of March, there were negative impacts, but in all-in-all we can say that we had a very robust quarter. That is why you see the numbers as indicated on this list.

And then what about the outlook for the first quarter? It is written on this slide.

In terms of revenue, it is between ¥70.4 billion to ¥73.9 billion; operating income, ¥37.3 billion to ¥39.6 billion; ordinary income, ¥37.7 billion to ¥40 billion; and quarterly net income between ¥22.2 billion to ¥23.6 billion. And this is the forecast that we have actually defined.

As written on the top part of the slide, we do still fear the impact of the earthquake and we do not know for sure what kind of effect it will have in the first quarter. Starting from the end of March to the beginning of April, we are seeing some recovery.

And we believe that the impact of the earthquake disaster will be short-lived. Based on those assumptions, we want to grow very aggressively.

Therefore, we have the budget as forecast accordingly. And so we will try to aggressively invest into areas.

And those are the reasons why we have the numbers within the forecast as indicated here. This completes my presentation and I would like to open the floor for questions.

[Interpreted] Do you have any questions? Person sitting in the second row.

[Interpreted] I’m Yoneshima, Barclays Securities. Thank you very much for your presentation.

There are three questions altogether. Firstly, I wish as the following question.

In Media business amongst the advertising, in the fourth quarter, what is the proportion of display and what is the proportion of search? What is the proportion in terms of the revenue?

And along with that what is the proportion of mobile? In the last quarter, it was about 6%.

And right now, including smartphone, what was the increase in the proportion of the mobile? Moving on to the second question, in the display advertisement in terms of the fourth quarter, I think in the display advertisement you stopped providing link.

I’m sure that there were some self-constraint and also there were constraints being exercised by the sponsors/companies. Let’s say, in terms of TV, you have a public advertising agency and they will get revenue but then there will be a different discount to be provided later on.

And I want to know what kind of accommodations that you made a commitment to the sponsors/companies? You did not register the revenue in March or, say, in April, you plan to provide some countermeasures for the companies that did not have the advertisement.

And in terms of first quarter outlook, I do understand that the future is not very clear. But in terms of the advertisement, especially display and search, what is the impact on the displays and on the search?

And what is your gut feeling regarding the impact it will have in the first quarter? And also in terms of the shopping digital content, I guess there will be increase in the sales, but whether it be positive or negative, what kind of impact do you think you will feel in what segment of your business during the first quarter?

[Interpreted] I’m Yoneshima, Barclays Securities. Thank you very much for your presentation.

There are three questions altogether. Firstly, I wish as the following question.

In Media business amongst the advertising, in the fourth quarter, what is the proportion of display and what is the proportion of search? What is the proportion in terms of the revenue?

And along with that what is the proportion of mobile? In the last quarter, it was about 6%.

And right now, including smartphone, what was the increase in the proportion of the mobile? Moving on to the second question, in the display advertisement in terms of the fourth quarter, I think in the display advertisement you stopped providing link.

I’m sure that there were some self-constraint and also there were constraints being exercised by the sponsors/companies. Let’s say, in terms of TV, you have a public advertising agency and they will get revenue but then there will be a different discount to be provided later on.

And I want to know what kind of accommodations that you made a commitment to the sponsors/companies? You did not register the revenue in March or, say, in April, you plan to provide some countermeasures for the companies that did not have the advertisement.

And in terms of first quarter outlook, I do understand that the future is not very clear. But in terms of the advertisement, especially display and search, what is the impact on the displays and on the search?

And what is your gut feeling regarding the impact it will have in the first quarter? And also in terms of the shopping digital content, I guess there will be increase in the sales, but whether it be positive or negative, what kind of impact do you think you will feel in what segment of your business during the first quarter?

[Interpreted] Okay. Let’s go to the first question in terms of the proportion of the ratio of contribution to the revenue.

So in the fourth quarter, I guess it is the same as the third quarter, so 67% or 68% as listing and the remaining one is display. And in terms of mobile, I guess we did not see much differences compared to the previous quarter, about 6%, I cannot see, 7%, yes 7%, so it went up slightly.

In terms of how we dealt with the advertisement during the earthquake, Yahoo! as a company constrained some advertisement or we used that site to provide information related to the earthquake.

And of course during those instances, we did not bill the sponsors. So during that time, there was no sales/revenue from that.

But there are cases in which the sponsors constrained from providing advertisements, so in principle that is the decision being made by the sponsors/company so we billed those sponsors. Now in terms of the forecast, I’m sure that there will be follow-up questions, so let me summarize the impact of the earthquake.

So let me give you the ballpark figure. So ¥1.0 billion to ¥1.9 billion wise, we lost it, because that should have been in the revenue.

So it might be about ¥2 billion in totality that has been lost because of the earthquake. And out of that ¥1 billion or ¥1.2 billion is attributed to the advertisement.

So as mentioned by Mr. Inoue, in March there have been cases in which including brand panels because of the earthquake information providing service we wanted to leverage on this space that was actually allocated for certain sponsors.

And on the other hand, as some sponsor advertisements did not set well during the earthquake, and in those cases we asked them to constrain from having the advertisement. In those cases, we did not bill them, but in terms of DVAC, it was the main sponsor and others actually had advertisement on TV, and in those instances we billed them.

So, there is no case in which we actually defer up until April. And also with the discussion with the sponsors, we did not have any problems in which we have to have their advertisement in April just because we did not have them in March.

And now, regarding the impact we have display and listing and we have IM, and so the ratio is 4, 4, 2, meaning that those are the impact in a relative sense that we felt because of the disaster. In terms of display advertisement, we have national clients.

Those are the centerpiece of the revenue source. And in terms of the sponsors after April, they have to decide on how they are going to leverage on the advertisement.

So there are some emotional aspects that we have to consider, whether it is ethically correct to have the advertisement or not, we don’t know what kind of move the national clients will take. Moving onto listing, it is click based advertisement revenue that we can get – of course the advertisers/sponsors’ intent is important, but also the users’ activities will impact the click based advertisement revenue.

After the earthquake, listing services have been used very widely. The usage rate went up, but as we can easily imagine, people did not click much on the advertisement but rather they will go directly to the core of the information that they want to get to.

So, the click rate went down dramatically, but now we are seeing some recovery. And in the first quarter this fiscal year, we don’t know what kind of trend it will have.

But in terms of listing, we believe that we’ll see a quick recovery, at least that’s the assumption that we have. Now, in terms of Interest Match, system wise we decide to come up with the filtering.

And even though we stopped the filter, it takes about two weeks to have an impact. And therefore in terms of the recovery, it is slightly slow as compared to listing.

And also in terms of IM, we have limited number of sponsors and the contribution by major sponsor is very large. So service company sponsors contributed a lot but they decided to stop the IM advertisement.

And so it all depends on what kind of action those industries will take in the future to come. So we do not think that there will be very strong recovery, we just hope that will happen.

Now in terms of business after the earthquake and merchants have Yahoo! Auction and Yahoo!

Shop, but we know that they are definitely located within the earthquake region, and we know that they will not be able to conduct business. And if the users actually try to buy and did not get the deliverables that will be a problem, and so we decided not to list that merchant.

That’s the countermeasures that we took, so we did not register the revenue from those merchants. And to those merchants we actually got in touch with them by phone and try to find out what will be their future intent and maybe they might want to have their merchant name listed again, it all depends.

And there has been a decline of about ¥200 million. Now in terms of a consumer or personal business, there are two categories; one is e-commerce shopping especially in terms of auction right after the earthquake as mentioned by Mr.

Inoue, the transaction volume went down dramatically. In terms of shopping, we are seeing very quick recovery, but in terms of auction, it is very event oriented, so we are seeing slightly weak recovery.

And so in terms of the auction participant, we don’t know what kind of move they will take. And so I do not think that there will be any quick strong recovery.

And so there has been a decrease of revenue by ¥500 million or ¥600 million, but in terms of – one-third of them, Yahoo! Wallet users involve has been halted.

We don’t know what will happen in the future, but we decided not to issue invoice to them in March. And there are victims and there are people who are using Yahoo!

even though they are in the earthquake region. And so from those people who continue using our service, we will continue sending the invoice and depending on the usage pattern, we will try to bill again, and so two-third of ¥200 million to ¥500 million invoice.

We actually had a negative impact in a very large scale, but I’m sure that we will see recovery, and those are the assumptions that we have laid out in coming up with the forecast for Q1. Thank you.

Thank you very much. And are there any other questions?

The person sitting in the front.

(Inaudible) from Morgan Stanley. Thank you very much for the presentation.

I have basically three questions. First question is related to what you talked about, the impact from the earthquake on the business performance.

In the forecast, what would be the impact of the earthquake that you incorporated into the forecast? If you can give us the ballpark figure, I would appreciate it.

Second is the search related advertising, the system – there is a migration to the new system, what would be the timing of that shift and will there be some impact on the business performance because of this change? So that’s my second question.

The third question, Yahoo! US sometimes want to sell your shares, so we hear about that through the news from time-to-time, so if you can talk about this, what is the current situation?

And if that happens, are there any views that you can share with us? Buyback of your share is also something that I’d like to know about.

So those are the three questions.

[Interpreted] You want just rough numbers. Well, honestly speaking, we don’t know.

As I said earlier, sometimes we see V-shaped recovery and some of the businesses is still down, so after April or in the coming two or three months, how will that change. That is something that is very difficult to forecast.

Having said that, we have not yet come up with two conservative numbers because as I said, of course, we don’t know about the advertisers, but the click rate is down and advertisers are not actively running advertising. So we still don’t know the specific impact of earthquake, but the range is something that we have.

For the fourth quarter, without the earthquake, the top line probably was outside of our expected range. So the sentiment is recovering very quickly, so it is possible that we go beyond the range.

But going below the range probably is unlikely, so that’s as far as I can talk about the rough forecast. As for the migration of the system of the sponsored search, we are thinking of postponing it a little bit.

Have we informed the advertisers? We have not yet informed them.

Originally we planned to migrate or change the system in the summer timeframe. But the impact of the shortage of electricity or blackout is something that we cannot forecast and this is of course related to money, so we don’t want any stakeholders to lose power or to suffer from the blackout.

So maybe we should wait until the temperatures are relatively lower, so that is our view about the timing. So we have not yet finalized the date, but very soon there are some preparations that advertisers need to make, so we will start to inform them.

So we would talk about what would happen and what the advertisers need to do in terms of preparation. So we would notify them with ample time so that the impact from the change can be minimized.

So we like to make a thorough preparation to do so. So we are starting to prepare for that.

So with the change or the change of the impact on the sales, that is something that we have not yet reviewed accurately. So maybe next time or in next meeting, probably we will be able to share with you, but as of now we cannot give you any specific numbers.

About the Yahoo! Inc., there are no progress or there are no news that I can talk about, but we continue to have discussions about Yahoo!

Inc. and Yahoo Japan and SOFTBANK among those partners, there are different views.

So of course we are not – we do not have the opposite views, but we are trying to have a win-win situation. We are trying to find the win-win solution, so we will continue to have those discussions for some time to come.

Thank you. Hope that answers your question.

Any other questions?

[Interpreted] I am Tomimatsu of Merrill Lynch Securities. I have three questions.

Firstly, in terms of the fourth quarter, in terms of the expenses and in terms of the revenue, the income fluctuated quite much and that has much to do with the goodwill and also the sales promotion that you have halted. And other than that, are there any factors that contributed to the decrease in the expenses, any factors before March ‘11.

So as compared to the forecast, was there any factor that contributed to the decrease of expenses? And in terms of the first quarter, is there any impact on the guidance?

That’s question number one. Moving on to the second question, in terms of the Brand Panel last spring, can you provide a notification of the increase in fee that was executed last fall?

And in terms of the fourth quarter, Brand Panel did very well and maybe you have considered having yet another increase in the fee, but because of the earthquake, including Brand Panel, this fiscal-year was, you chose at the concept of increasing the fee or from, say, mid-fiscal year, if you see very strong recovery of the demand, do you plan to revisit the possibility of increasing the fee? So what is your over positioning of whether you’re going to increase the advertisement fee or not?

Moving on to the third question, smartphone usage is increasing. How will you plan to monetize on the increase of smartphone?

I believe that advertisement becomes very pivotal. You had displayed, and I believe that you cannot monetize sufficiently, I’m sure that there will be unique usage on smartphone and maybe you might need a new advertisement product to leverage out smartphones’ function.

And I do not see any idea coming out from you, I know that you have application advertisement and other advertisement format, but being Yahoo!, I want to see a new movement on your side proposing new advertisement format leveraging on the smartphone capabilities. And so in this new fiscal year, say, in the second quarter, I believe that coming up with a new, a killer advertisement based on the smartphone will be very important for your future business and I would like to hear your view regarding this.

Thank you.

[Interpreted] I am Tomimatsu of Merrill Lynch Securities. I have three questions.

Firstly, in terms of the fourth quarter, in terms of the expenses and in terms of the revenue, the income fluctuated quite much and that has much to do with the goodwill and also the sales promotion that you have halted. And other than that, are there any factors that contributed to the decrease in the expenses, any factors before March ‘11.

So as compared to the forecast, was there any factor that contributed to the decrease of expenses? And in terms of the first quarter, is there any impact on the guidance?

That’s question number one. Moving on to the second question, in terms of the Brand Panel last spring, can you provide a notification of the increase in fee that was executed last fall?

And in terms of the fourth quarter, Brand Panel did very well and maybe you have considered having yet another increase in the fee, but because of the earthquake, including Brand Panel, this fiscal-year was, you chose at the concept of increasing the fee or from, say, mid-fiscal year, if you see very strong recovery of the demand, do you plan to revisit the possibility of increasing the fee? So what is your over positioning of whether you’re going to increase the advertisement fee or not?

Moving on to the third question, smartphone usage is increasing. How will you plan to monetize on the increase of smartphone?

I believe that advertisement becomes very pivotal. You had displayed, and I believe that you cannot monetize sufficiently, I’m sure that there will be unique usage on smartphone and maybe you might need a new advertisement product to leverage out smartphones’ function.

And I do not see any idea coming out from you, I know that you have application advertisement and other advertisement format, but being Yahoo!, I want to see a new movement on your side proposing new advertisement format leveraging on the smartphone capabilities. And so in this new fiscal year, say, in the second quarter, I believe that coming up with a new, a killer advertisement based on the smartphone will be very important for your future business and I would like to hear your view regarding this.

Thank you.

[Interpreted] Well, let’s start with the first question. As mentioned by Mr.

Inoue, we halted on the promotion that is why the expense went down. We had the budget for TV commercial and with SEM, we had different advertisement, but we halted on that plan as well.

And also in terms of business commission, in terms of the development, we asked engineers and production people to work on the earthquake related scheme. Therefore, we actually delayed some program and so we did not actually use that budget.

But all-in-all, we decided not to use the budget for promotion that’s why the expense went down. So in terms of the promotion in the first quarter and the second quarter, do you plan to change the budget for the sales promotion?

Say, I forgot to mention before in terms of top line, we cannot really predict what will be the number but I do not think that this condition will continue one year or two years down the road. And basically, Yahoo!

Service must be further reinforced and we will make due investment in mid to long-term perspective. We do not plan to pace down our investment tempo.

You can calculate the numbers later, but in terms of SG&A increase, its increase rate is higher than that of revenue, and that actually reflects our policy/strategy of trying to continue investing for the future. In SG&A, there are different items and there are items that we can tackle quite easily.

On the other hand, there are some items we must delay. And so we feel that we can become very aggressive we will do so.

And in terms of the development in the first quarter or maybe in May and June, we will use the budget, including the business commission, in order to promote further development that is needed. So the second question relates to the increase of fee.

Well, so far we haven’t thought thoroughly about that, of course that’s on our mind all the time but nothing has been materialized or turned to be anything tangible. In terms of Brand Panel, we increased the fee quite recently, so we do not think that we can increase the fee every quarter or every year.

I do not think that that is the demand situation now. In terms of the Prime Display, considering the demand supply relationship, as suppliers increase and you think – if you think about the demand, I do not think that the supply is few, so there we can ask will it increase, I do not think so and so maybe it is little bit more down the road at least that’s my personal take.

We have to see the economic recovery and also we have to see the recovery from the earthquake disaster. So in terms of sell-through, which is the number of page views that are being sold based on – and the amount that is salable, we have to increase this sales-through rate that’s step number one.

And once we reach certain sales-through rate and then the environment will be prepared to ask for the increase in fee, so we hope that we can think there will be pictures in. Now about the smartphone, maybe the time is not right yet to meet your request.

For the advertisement to become a viable business, the advertisers must produce the critical mass. And in terms of the branding advertisement, which will be one factor to look at and in terms of smartphone if we limit the usage only on the smartphone we cannot actually attain the critical mass yet.

Of course we are reaching that level but the time is not right yet. Having said that, I do not think that smartphone-based advertisement will create any tangible figures.

But regarding the environment of usage, what kind of advertisements are favorable for smartphone? Of course Yahoo!

has started considering what kind of advertisement look and feel is good. The screen might be small but users will accept and that form advertisement.

We are conducting different trial and error experiment to see what will be the acceptable and favorable form of advertisement for smartphone. I don’t know what we have right now is ideal or not but gradually we are trying to form the format that is most applicable for the smartphone.

And once we come out with the prototype, so to speak, and if the smartphone users like that format and then we can create the advertisement market based on smartphone. And now regarding Listing Advertisement, we believe that there is a potential and search volume is increasing and also Interest Match advertisement is conducted on pilot basis.

And gradually, we are establishing and – a definition of look and feel for the smartphone IM that might be accessible to the users. So we are on the experimental level.

[Interpreted] In terms of Yahoo! Local, initially we were scheduled to have it launched.

We had to come up with countermeasures for the earthquake and you’ve seen the list of kind of programs we launched, so the development and editing and also different other resources have been allocated for the countermeasures to the earthquake. Therefore there has been some delay in the development of Local.

[Interpreted] Yes. We will start launching Yahoo!

Local as of 1st of June. Thank you.

And the second about the smartphones, the usage or you would be enhancing the other services and you will be making some investment. So what kind of investments are you going to be making?

What would be the purpose of the investments? So if you can tell us that especially for search.

Search is very important service, I believe, so the competitors in order to increase your – the usage of your search the investments or any trials you plan to have, if you can talk about those?

[Interpreted] About the adjustments, we are currently adjusting the answers, to answer. So let me answer to your second question about the smartphones or investments in the case of Yahoo!.

Actually we don’t really make a lot of cash investments rather human resources investments for different developments. How do we allocate the human resources?

That I believe is the most important element in making investments decisions. So from some time ago, for the new development, new investments, it is basically for smartphones.

So therefore the search it’s not just for the search but for all the services we are focusing on the smartphones. The servers and others, of course, are also included, but they are not the major factors.

[Interpreted] I think Yahoo! will continuously do so as we did for PC and for the Japanese mobile phones, and we will continue to do so for the smartphones.

[Interpreted] So that’s something that we would try to pursue in our development efforts, that is the basics. So for Yahoo!, I think to be engaged in those activities would be the most important investments that we will be making.

[Interpreted] We like to get back to you. Any other questions?

And what is the ballpark figure for the next fiscal year? And in terms of Shirakawa data center, is that plan still on?

And if not what will be the alternative site that you will have your data center? And I have another related question and maybe you did not talk much about it yet, but in terms of SG&A what is the proportion of the electricity bill?

And how do you plan to manage the electricity bill in the future to come? Two questions actually.

[Interpreted] Well, in terms of the increase of CapEx, Mr. Kajikawa will talk about that later.

In terms of Shirakawa data center, we are postponing the construction. Initially, we did not know whether the tox can get to the site and what is the impact of earthquake.

And we actually conducted a survey of that level and for now we are temporarily stopping the construction, if not back to nil but rather we are just holding the plan for now. But we need to have the data center in the Eastern Coast, so we plan to have the data center one way or the other.

Now in terms of the electricity bill, data center’s ratio is very high. And that is the conspicuous nature of our business.

Globally speaking, we have the air-conditioning need but we need to reduce that portion. We need for servers but the main question is, how we can reduce the usage of electricity other than the servers and that is the area that people are trying to find out ways.

And the lower the electricity consumption by non-servers more efficient the data center is. In terms of SOFTBANK IDC’s most advanced data center, domestically speaking we are one of the top ranking efficient data center.

We have the vastest system. And regarding the air-conditioners we do not have to turn it on, but we will use the external air to cool the system.

The one that we have designed for Shirakawa is more advanced and so we will further leverage on the external air and so that we can reduce the need of air-conditioning as much as possible and that was the plan that we had. We are temporarily stopping the construction, but in terms of that design that we came up for Shirakawa we will use that operational mode for other data centers as well.

And there will be increase in services and there will be cloud services as well. And maybe we might have the service of other companies and total power consumption will increase.

[Interpreted] It differs. It will be lower at the data center and so data center itself is not bad onto itself; it is good.

So if we can have the server farms at the data center and consolidate all the service, even though the power consumption goes up, the power consumption by other areas, such as the buildings, the office buildings, the consumption will go down. Therefore, if you take a look at those two factors, the establishment of data center will act positively.

So we are aggressive on that plan.

(Inaudible) on SOFTBANK actually are taking new actions. Google is investing in the solar panel companies.

And when you think about the future investment, do you plan to invest in any electricity-related business? Do you have any plan or no plan?

(Inaudible) on SOFTBANK actually are taking new actions. Google is investing in the solar panel companies.

And when you think about the future investment, do you plan to invest in any electricity-related business? Do you have any plan or no plan?

[Interpreted] To-date, we do not have such a plan yet. Yahoo!

is the internet company, that’s our positioning, and we are not a utility company yet. At least that is our current positioning of ourselves.

In terms of the summer power consumption decrease that we have to abide by in Kanto region or in East Japan region, there are multiple servers. As far as Yahoo!

services are concerned, we have duplication in Kansai region. Therefore, if needed, we can continue providing service in the Eastern region using other localities’ service.

[Interpreted] Going back to your first question that is about the fixed assets, which part that you were referring to?

[Interpreted] In the past two years, I think it’s slightly up, about ¥1 billion higher

[Interpreted] Rather than the major acquisition, the replacement of the servers, for example, the data center; by having a new data center, we would move the servers from the old data center to the new one. So of course we can use the existing servers and in some cases, we would buy new servers.

So that’s a part of it. And I think that includes the servers on the 35 floor of this building.

No, no that’s not included, sorry. So ¥10 billion – if it was ¥10 billion, that’s a big number, so I know what it was, but I think it’s the just accumulation of the small ones, so it doesn’t mean that we changed a policy or we started buying something.

In the first quarter, the power saving topic came up earlier, so how can we reduce the consumption of electricity? One thing is that, by replacing to the new server with the same capacity, we can lower the power consumption, so replacement will be promoted.

So in the first quarter and onwards, we would be investing for the replacement of the servers. If it is the major replacement, it will be in the fixed cost or assets.

[Interpreted] We don’t really disclose that, because the data center was mentioned earlier – the percentage of the data center is very high in terms of power consumption. So this building also is the case.

How can we make changes so that we can save power? For example in the offices last year, it’s not related to the earthquake, but we wanted to be more eco-friendly, where we wanted to be more green, so we increased the temperature level and that leads to the lower power consumption.

And another thing is, by changing the data center, the power consumption would drastically change. I don’t know whether we can disclose any numbers.

Also, the major part is parent company. We don’t know the clear numbers.

[Interpreted] Did we get the answer for that adjustment numbers? We do?

So it’s down? It’s up?

The question was ¥50 billion – sorry, ¥500 million and minus, and that was the question?

I’m sorry, please bear with me so that I can understand this answer and maybe we can go to the next question.

I’m sorry, please bear with me so that I can understand this answer and maybe we can go to the next question.

[Interpreted] Any questions that I can answer? Yes?

[Interpreted] In terms of our Chinese business, in terms of the cross border, we haven’t completed the preparation. So we do not make any advancement as compared to the previous quarter.

And in terms of Mobage, the number of users is increasing very steadily and likewise, revenue is increasing. And DeNA is the partner that we work with in Mobage and (inaudible) we work in Sengoku IXA, and both of them are growing very well.

So we started games on PC, and in terms of the developed countries, as the PC-based social game is increasing, but in terms of Japan, mobile phone was the initial platform. So maybe in Japan, it might be an exception in which mobile might be the basic platform rather than PC.

So that’s the risk that we have to understand. But in terms of Mobage, we don’t have to worry about that.

In Japan, we do have the available game market, so with those two partner companies that I have mentioned, we will want to be more aggressive in coming up with new games and new services. Now let’s talk about GyaO.

In terms of this quarter, we were impacted by the earthquake, so there has been the constraint of advertisement, and decrease of advertising revenue. But in terms of the number of users and time of view, we are seeing increase, and also sales of advertisement is increasing.

And so, we were able to have profit during the fiscal year. When we acquired GyaO, since it incurred much deficit in the past, so people were concerned about our decision but fortunately, the sales went up and also, we tried to reduce the cost incurred on the data center side.

And so of course, we are not aiming at a very large income, but we will be able to pursue very plausible profit. But for now, we will focus more on the expansion of users, as well as services, rather than increasing the profit for now.

And so different countermeasures around those pillars will be executed. Thank you.

[Interpreted] I think I understand now. So it’s a little irregular.

In the third quarter – up to third quarter, the business performance was very good. So in the bonus, there was a special bonus added, and the special bonus was up to the third quarter, and in the fourth quarter probably it was possible, but dealing with the earthquake impact was tough.

So we are not paying the special bonus in the fourth quarter, so that’s the one difference. As for the data center, the location, I’m not sure whether I can talk about this, but from the municipality, there is a subsidy, and that subsidy, once per year, I believe, is included, so that part is deducted from the expenses, so that is down.

And the last one is in R&D, the development expenses we booked. Two years ago, the organization was changed, so development related engineers moved from the each business segment to the R&D headquarters, and the result of the development will be allocated to the different businesses.

And expenses was not so high. Initially, the development cost, we’ll book as R&D and then allocate it, so that portion did not grow, and that was another reason behind the lower number.

So the question which was asked earlier was about this elimination, and the SG&A portion of that was smaller than before, and so those are the reasons behind it. I hope that answers your question.

Any other questions?

[Interpreted] As of now, as usual, the mobile ads – the contribution of the smartphone is very high. But the breakdown percentage are not disclosed.

So in terms of growth rate compared with the general mobile phones, the advertising is growing more than double in the case of smartphones.

You mean that in terms of the growth from the previous quarter?

You mean that in terms of the growth from the previous quarter?

[Interpreted] Yes, because we didn’t have this last year. So page 37, you said.

There is a page view from smartphones, that was your question. Yes.

The applications partly are included. Actually, the applications that we had initially, we did not have idea to count page view, so it was not counted.

So it’s a little stupid, but the recent one, since we are providing the ads, we have to be able to measure the page view. So now, we can count the page views.

So after some time, we would have a more accurate number. But for the first several applications, they are not counted, but in terms of the trend is the same, so the new ones are all included, so I think it’s okay.

[Interpreted] I think mainly browsers. But – here, most of them are browsers in this case.

[Interpreted] Any other question? Person sitting was in the back.

[Interpreted] As I have mentioned before, say in terms of the impact after earthquake, we believe that it will be short lived. Therefore, in terms of mid to long-term, we believe that we will continue growing.

Having said that, we will continue the investment. Then what is the priority?

Of course, we will be investing in the priority of growth. And we are trying to find out which segment will be growing the most, and it will be smartphone and smartpad.

And in two or three years down the road, we believe that these will be the segments that will be growing very rapidly. Therefore, smartphone and smartpad will be the domain that will be given the first priority.

In terms of the types of services, what will be most appealing, what will be most convenient amongst the users? Of course, we have to think that down the road, but basically, regarding all the services that we have, we have to consider how we can customize for smartphone and try to find the most affinity-based services that can fit in smartphone.

So in terms of search and e-commerce, those were the areas that we’ll be considering first. I hope that answers your questions.

Yes, the person sitting in the second row.

Does it mean that people – or we have a budget, but because of the sympathy, or because of a kind of emotional reason, be lower? Or the cars, supply chain because of those problems, that there won’t be sufficient budget, or is that the case or not?

Could you talk about the differences from the Lehman shock and the differences from the usual first quarter? The second point is a kind of a detail, related display listing in IM.

A year ago and the previous fourth quarter, was it positive or negative? Is it up or down?

YoY or quarter-on-quarter, was it up or down? Then lastly, about the display, the first quarter, usually there is a special demand of ¥1 billion and the net advertising, here it says ¥1 billion to ¥1.2 billion and it’s ¥4.42 billion, so that means that ¥400 billion to ¥500 billion are due to the display – million, sorry – is the display.

Does this mean that there were budget, but it was not used? The last week of the March usually is the very active time, but because of the earthquake it didn’t come in, what were the reasons?

[Interpreted] The difference from the Lehman Brothers – collapse of the Lehman Brothers, well, the question I believe is that impact of the earthquake. So, well, I gave the answer earlier, but the first quarter, how is that – how will the first quarter different from the previous first quarters in the past, it’s not different.

April and until the May timeframe there are – companies are still formulating the budget so it’s very uncertain. It’s not the very active time for the advertisers.

So the part that we don’t know is that our result after the mid May, whether we have an environment, where we can run the advertising or not. The difference from the Lehman shock is that in the case of 2008, the economy, global economy started to go down and it was quite uncertain at that time and the budget of the advertisers were based on that.

So when will that impact end was totally uncertain. So we were going through trials and errors at that time.

But this time, when you consider the advertisers trying to formulate the budget of course there is a nuclear power plant issue but there was an earthquake and then what was the damage and how do we build or rebuild including the service channel. It is different from the uncertainty that we had after the collapse of the Lehman Brothers, which was stronger in terms of the uncertainty.

So maybe at the end of May, June, we would – we will see the very active advertising. So that would be same as usual first quarter.

As for the advertising, your question was about the result. The overall advertising, year-on-year, double digit growth was observed.

In answering your question, compared to the growth of the third quarter, it was lower, although we maintained a double digit growth. As for the fourth quarter, it was lower than what we expected and probably we – well, 80% of the ad was gone.

So there were some last minute advertising until 10th of March, usually we start to see some enquiries. So compared with the fourth quarter last year, it was ¥400 million to ¥500 million promotion or the last minute advertising and we expected the same level for this year.

But it was not zero, but that was about the level of the numbers that we consider to include it. As for display, the third quarter was more than double, it was very strong growth, but the fourth quarter was down especially year-on-year, the March last year – the third quarter – March last year was very strong, so it was the one-digit growth.

And as far listing, January and February before the earthquake it was growing very strong, saw double digit, but unfortunately, it was not high as high as third quarter but it was higher than the second quarter, so very strong quarter I believe. I hope that answers your question.

As for IM, it wasn’t bad, but as I mentioned in the case of IM, the number of the advertisers is still relatively low and unlike the search sensitive filter, unsuitable – sensitive filter to get rid of the inappropriate advertising. But by using that filter we try to eliminate the unsuitable or inappropriate ads.

But usually there is a time lag or it takes time before we see the effect of it, usually two weeks – one to two weeks. So because of the filtering it’s down, so the growth of the IM roughly speaking is 20% – 30%, but now it’s down to single-digit growth.

So this is probably the biggest uncertain area in the first quarter and onwards. Thank you.

[Interpreted] Any other question? No more question?

Thank you very much.