Third Point LLC Letter to Yahoo! Board of Directors

Third Point Demands Release of Yahoo! Inc.'s Process Letters to InterestedBuyers and Continues to Oppose Reported Negotiations for "Sweetheart" Dealwith Private Equity Firms About Third Point LLC: Third Point LLC is an SEC-registered investmentadviser headquartered in New York, managing $8.0 billion in assets. Foundedin 1995, Third Point follows an event-driven approach to investing globally. December 13, 2011Board of DirectorsYahoo! Inc.701 First AvenueSunnyvale, CA 94089Attention: Mr. Roy Bostock, Chairman Dear Directors: Third Point LLC, as the beneficial owner of 5.2% of Yahoo! Inc.'s ("Yahoo")outstanding shares, remains extremely troubled by news reports regarding thedysfunction and inequity being exhibited in the process of maximizingstockholder value that the Board is allegedly "managing". We are disturbedbut not surprised by this mismanagement given the history of strategicbungling by Yahoo Board Chairman Roy Bostock and Founder Jerry Yang, whichhas been chronicled in our previous letters and in numerous critical mediaand analyst reports. As significant shareholders with our own fiduciaryduties to investors to uphold, we cannot stand by silently if such reportsare accurate and Yahoo, a company in no need of cash, plans to engage in asweetheart PIPE deal which will serve only to entrench Mr. Yang and thecurrent board while massively disenfranchising public shareholders andpermanently robbing us of the opportunity to obtain a control premium. We are not alone in our concerns. Shareholders, analysts, and the media arequestioning the integrity of the process currently underway. As stewards ofour assets you are charged with a duty to place stockholder interests abovepersonal gain or other motives. In order to allay the concerns anduncertainty permeating the marketplace and provide much needed transparencyon the supposed "process" that Yahoo is undertaking, we ask that youimmediately make public the letter(s) in which Yahoo invited third partiesto make proposals for the Company (the "Process Letters"). We assume thatYahoo's Process Letters did not place any artificial restrictions on theproposals that the Yahoo board was willing to consider in its search forstrategic alternatives, such as discouraging, or even prohibiting, bids topurchase Yahoo in its entirety. Of course, we appreciate the need for confidential negotiations, andtherefore stockholders need not know at this stage who received the ProcessLetters. Rather, stockholders should simply be allowed to see if the ProcessLetters, which may be published in redacted form, are consistent with theBoard's paramount duty to maximize stockholder value. Additionally, ThirdPoint does not seek and does not expect to receive material non-publicinformation and thus requests that you file such letters publicly with theSecurities and Exchange Commission via Form 8-K with all deliberate speed. In light of the serious, timely concerns expressed by nearly all Yahoostakeholders and interested parties, undertaking this action is the onlyfair and reasonable thing to do. Very truly yours,Daniel S. Loeb