YAHOO! REPORTS SHARP GROWTH IN EARNINGS AND TRAFFIC
Online directory Yahoo! Inc. Wednesday reported another quarter of
robust growth, helping restore some investor confidence to the
volatile Internet sector.
Yahoo said it earned $16.7 million, or 15 cents a share, in the third
quarter, up from $680,000, or 1 cent a share, a year earlier. The
earnings were also well above the 9 cents a share that most analysts
had been forecasting.
Sales rose to $53.6 million from $18.1 million and traffic to its Web
site surged to 144 million page views a day in October from 115
million in June.
Yahoo shares, which fell sharply Wednesday, regained some of the lost
ground in after-hours trading, following the release of the
third-quarter numbers.
The stock, which had closed the regular session down more than $10 a
share at $114.375, was trading at $116.50 after the earnings report.
Stocks of the competing directory Excite Inc. (XCIT) and online
retailer Amazon.com (AMZN) also showed small bounces in after-market
trade.
Yahoo, which derives most of its revenues from online advertising,
said it built its base of advertisers to 1,950 in the third quarter
from 1,800 in the second, and that most advertisers increased their
spending.
Although online advertising has grown dramatically over the past year,
Yahoo President Tim Koogle noted it still accounts for only a small
portion of total advertising dollars. For this reason, he said he
continues to see strong growth potential at Yahoo and many other
Internet businesses. Because the Internet is still an immature
market, he said online companies will be insulated somewhat from some
of the problems plaguing the global economy.
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