This will help the Techs>
Sunday January 9, 11:22 pm Eastern Time
CORRECTED - Web leader Yahoo expected to have
stellar quarter
In final para of story headlined ''Web leader Yahoo expected to have stellar quarter'' please
read in final para ...particularly Geocities... instead ...of particularly Geocast... (This correct
name)
A corrected repetition follows:
By Andrea Orr
PALO ALTO, Calif., Jan 9 (Reuters) - Yahoo Inc. (NasdaqNM:YHOO - news), the popular and consistently profitable
Internet media giant, is widely expected to have another stellar showing when it reports fourth-quarter results on Tuesday.
But the good news from Yahoo will not necessarily represent the rest of the Internet sector.
After several quarters of consistently higher sales and profits that surpassed Wall Street forecasts, Yahoo has extended its lead
over the competition.
Analysts, who just a year ago grouped Yahoo in with a crowded group of Internet services, increasingly view the company as
one of just two top players grabbing a growing portion of the market's audience and advertising dollars.
''They've really pulled ahead, along with AOL,'' said Forrester Research analyst Charlene Li. ''Consistently, deals are being
done with AOL and Yahoo, and not with the other portals.''
Those deals, which range from straight banner advertising to a variety of corporate sponsorships, could prove to be particularly
lucrative in the fourth quarter, which encompassed the holiday shopping season.
Although Yahoo does not sell any merchandise directly, it took full advantage of the electronic commerce explosion by offering
a shopping service, linking consumers to more than 8,500 online merchants. The company makes money on advertising on the
site and on referrals that bring online sales.
Yahoo has not yet disclosed the full results for its shopping service but shortly after Christmas it did report that orders made
through its site over the past month were almost five times higher than in 1998.
It is this type of accelerated growth that has helped Yahoo remain one of the most popular Internet stocks for several years,
while many of its competitors have fallen by the wayside.
A recent survey found that Yahoo currently services 56 percent of all online search queries, with its nearest competitor, CMGI
Inc's Alta Vista (NasdaqNM:CMGI - news), accounting for about 12 percent. Overall traffic figures, which also include time
spent on features like shopping, chat rooms, news and sports updates, are less dramatic, but they also show Yahoo as the clear
leader among Internet portals.
''Every single quarter they do better and better,'' said Li. ''It's sort of this whole upward spiral, that the more money they
spend on branding, the more users they attract, and the more money they make on advertising, and the more they have to
spend on branding.''
Adds Bob Walberg of briefing.com in Chicago: ''It's not necessarily that their site is better than the other portals, but they were
there first, and they get a lot of action.''
Of course with this leadership position comes high expectations, which is why some analysts said the company will have to do
better than prevailing forecasts to make an impression on Wall Street.
First Call/Thompson Financial, which tracks analysts' estimates, said the consensus earnings forecast for the fourth quarter is 15
cents per share, compared with 11 cents last year. Some analysts have quietly said, however, that they are looking for a profit
closer to 18 cents a share.
Much of the strength of the fourth quarter could be already factored into the company's stock price, which closed Friday at
407-1/4, up 39-1/16 on Nasdaq. After rallying in late 1999, the stocks has become extremely volatile and is off a recent high
of more than 500, but still well above its 52-week low of 110.
Because of the high stock price, some analysts also expect Yahoo will announce a stock split.
And beneath its strong sales and income figures, analysts will be watching other indicators of the company's long-term strategy.
Many will look to see how much of the company's revenues come from non-advertising dollars.
Yahoo has repeatedly said it aims to reduce ad dollars as a portion of overall sales so it is not dependent on the banner ad. To
date however, ads remain its dominant revenue stream.
Walberg said he is also curious to see how successfully the company integrates and makes money from companies it acquired,
particularly Geocities and broadcast.com, which both commanded multibillion dollar price tags.
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