NEWS: INTERNET - YHOO - HOT - ON FIRE - AFTERHOURS $36
AOL hasn't earned a penny yet since 1992 IPO. YHOO is already profitable in less than 1 year since IPO. AOL has a market cap of 4.3 billion. YHOO has only a market cap of 1 billion.
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Internet Bellwether Yahoo Tops Wall Street's 1Q View
Dow Jones News Service ~ April 9, 1997 ~ 8:32 pm EST
By Mark Boslet
PALO ALTO, Calif. (Dow Jones)--Yahoo Inc. (YHOO) topped Wall Street's first-quarter
estimates by a significant margin, setting the stage for what some analysts said would be
strength in technology shares Thursday.
The Santa Clara, Calif., maker of the popular Internet search service has become a bellwether in
the group by virtue of its rise to profitability in the past two quarters and by the sharp growth
in users of its site. Profitability remains a fleeting goal for many Internet companies.
The company also is among the first to report its quarterly numbers.
Yahoo Chief Executive Tim Koogle attributed the quarterly performance to the continued
development of the Yahoo brand and to the company's careful pursuit of advertising dollars.
For the month of March, Yahoo averaged 30 million page views a day, a 50% rise over the 20
million-a-day average in December. Both the number of people coming to the site and the
number of pages they view while there have increased, Koogle told Dow Jones.
Meanwhile, Yahoo's advertisers grew to a total of 700 by the quarter's end, up from 550 at the
end of the fourth quarter.
Koogle said he expects to receive more multinational advertising contracts, such as the one
Yahoo announced this quarter from International Business Machines Corp. (IBM), where an
ad campaign can be rolled out in several languages simultaneously.
For the quarter ended March 31, Yahoo reported revenue of $9.5 million, compared with $1.7
million a year ago and Wall Street's estimates of $8.4 million. Earnings came to 1 cent a share;
Wall Street had been looking for a loss of 3 cents. The company posted breakeven results a
year ago.
The first-quarter gross margin climbed to 87% compared with 85% in the fourth quarter as
Yahoo was able to reduce the costs of creating content for its Web site.
Yahoo receives all its revenue from advertising and appeared largely unaffected by what is
typically a seasonal slowing in the first quarter. Koogle said the results proved a ''bit better''
than the company's internal plan. But he stuck to his claim that in 1997 Yahoo would not limit
investment in its business for short-term gains in profitability.
The company also during the first quarter saw strong growth in the use of its Japanese
service, with average daily page views climbing to 2 million.
In after-hours trading, Yahoo shares were at 36, up from a close of 34 7/16.
(END) DOW JONES NEWS 04-09-97
8:32 PM
Company Symbols: LCOS NSCP SEEK XCIT YHOO |
