Statement of John Scheibel

Washington Counsel and
Director of Government Relations
Yahoo! Inc.

Portals Roundtable: Relationships Between Broker-Dealers
and Internet Web Sites

May 23, 2001

Madam Chairman and Members of the Commission, Yahoo! appreciates the opportunity to appear before you today on this most important topic. Yahoo! is fully committed to the protection of Internet consumers and the investment area is no exception.

Yahoo! is a pre-eminent Internet communications, commerce and media company, offering a comprehensive branded network of services to more than 192 million individuals worldwide each month. We are an aggregator and disseminator of information and advertising. We neither perform the functions of a broker-dealer nor do we hold ourselves out as a broker-dealer to our users. Those who come to Yahoo! understand this and recognize that if they seek to trade in securities, they must do so through a registered broker-dealer. We therefore respectfully submit, Madam Chairman, that Internet portals, such as Yahoo!, should not be regulated as broker-dealers.

As an aggregator of information, Yahoo!'s objective is to facilitate ease of access to the incredible resources available on the Internet. We do this in a broad array of categories and subcategories, from Arts and Humanities, to Business and Economy, from Entertainment to Health, from News and Media to Recreation and Sports. While we have branched out considerably since the time that our founders began their directory in 1994, our commitment to making information available has never wavered. That is what we do. The quick, easy and personally tailored availability of information is good for our users as consumers, as citizens, as patients, as parents, as students and in any other capacity in which there is a need for such material. In addition to our directory, as a broad based Internet portal, we have a wide variety of offerings that number close to 90, including Yahoo! Sports, Yahoo! News, Yahoo! Maps, chat rooms and clubs, movies and music, e-mail and instant messaging and dozens more. We also run a large amount of paid advertising, the content of which is the responsibility of our advertisers.

Yahoo! Finance represents one of the approximately 90 properties on Yahoo! Yahoo! Finance makes available an extensive amount of information, all provided by third parties. It includes real time stock quotes provided by the markets, in-depth information on individual stocks, news on international financial and economic developments, and news and editorial comments from respected sources such as Business Week, Motley Fool, the Industry Standard, The, and Forbes.

Since we share the Commission's desire to protect investors, it is important to make clear, not only what we do, but also what we don't do. We do not open, maintain, administer, or close investment accounts. We are not involved with the solicitation of trades or the resolution of problems or disputes involving brokerage accounts or related securities transactions. We do not hold ourselves out as a broker, as taking orders for securities, executing trades or as assisting in settling securities transactions, nor do we in fact perform any of these functions. We do not answer questions or engage in negotiations involving brokerage accounts or related securities transactions; we do not make recommendations regarding potential investments nor do we make suitability determinations for any investor.

A significant part of Yahoo!'s income derives from advertising that can be found all over the site and that includes Yahoo! Finance. On Yahoo! Finance, as well as other parts of the site, we carry the advertising of broker-dealers. Payment for the advertising of broker-dealers is based on the number of page views, the number of click-throughs, the number of completed applications to open a brokerage account, or some combination thereof.

We believe that the extensive financial and economic information available on Yahoo! Finance serves the interests of consumers. It is our sincere desire to continue to provide this quality and quantity of material. As has been widely discussed, the Internet economy is in transition. It is not absolutely clear exactly what course this new economy will take. If you agree that there is significant value to consumers in the information and services that we currently provide, we respectfully urge you to exercise caution in restricting the terms under which we can financially support the provision of such information and services. It is extremely important that we be allowed to avail ourselves of the economic efficiencies that the Internet brings to our relationships with our advertisers. We believe that allowing for flexibility in these relationships is consistent with protecting the interests of consumers. We do not believe that it would be appropriate to regulate Internet portals such as Yahoo! as broker-dealers, nor do we believe that it would serve the best interests of investors.