The statement of cash flows for Yahoo! are as follows:

Yahoo! Inc. Consolidated Statements of cash flowYear ended December 31, ($ thousand) Year 8 ($) Year 7 ($) Year 6 ($) Cash flow from operating activitiesNet income(loss) 25,588(25,520) 6,472Adjustment to reconcile net income (loss) to net cashprovided by (used in) operating activitiesDepreciation and amortization 10,2152,737639Tax benefit from stock options 17,827- - Non-cash charges related to stock option grants and warrant issuances 9261,676197Minority interest in operation of consolidated subsidiaries (68) (727) (540) Purchased in process research and development 17,300- - Other on cash charge - 21,245- Changes in assets and liabilitiesAccount receivables, net (13,616) 5,9634,269Prepaid expenses 2,144(6,110) (386) Account payable 5152,4251,386Accrued expenses and other current liabilities 16,6887,4044,393deferred revenue 33,2102,9831,665Due to related parties (451) 330948Net cash provided by (used in) operating system 110,278480(2,394)

Cash flow from investing activitiesAcquisition of property and equipment (11,911) (6,722) (3,442) cash acquired in acquisitions 199- - Purchase of marketable securities (471,135) (58,753) (115,247) Proceeds from sales and maturities of marketable securities 158,35086,67843,240Others investment (5,445) (1,649) (729) Net cash provided by (used in) investing activities (329,942) 19,554(76,178)Cash flow from financing activitiesProceeds from issuance of common stock, net 280,6797,51642,484Proceeds from issuance of convertible preferred stock - - 63,750Proceeds from minorityinvestors 6009991,050Other - 1,106128Net cash provided by financing activities 281,2799,621107,156Effect of exchange rate changes on cash and cash equivalent 288(380) (63) Net change in cash and cash equivalents 61,90329,27528,521cash and cash equivalents at beginning of year 63,57134,2965,775cash and cash equivalents at end of year 125,47463,57134,296

You are required:

a. Yahoo!'s operations did not produce significant cash flows during Year 6 and Year 7. How does Yahoo! finance its growth in the absence of sufficient operating cash flows? b. What appears to drive the operating cash flows of Yahoo! c. Yahoo! Engages in purchases and sales of marketable securities. Why do you believe Yahoo! pursue this activity? d. Yahoo! reports $33.21 million of deferred revenue. Based on your understanding of Yahoo!'s operation, what do you believe this amount represents?