Like most speculative-growth companies, Yahoo doesn't generate enough cash internally to pay for an aggressive expansion. It must look outside for capital--either by borrowing, or by issuing stock in the equity markets. Given the market's ravenous appetite for Internet stocks over the past few years, Yahoo has understandably financed most of its expansion with equity. It had its initial public offering in 1996, and since then it has issued stock to pay for its many acquisitions. It has little long-term debt, which means it doesn't have to worry about interest payments. Overall, its balance sheet looks very healthy. In contrast, Amazon.com AMZN, another highly successful Internet company, has borrowed over $2 billion and is highly leveraged.
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