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To: Glenn D. Rudolph who wrote (9292)	7/7/1998 7:44:00 PM
From: Narotham Reddy	Read Replies (1) \| Respond to of 164684

Yahoo! to kick off Internet earnings reporting season Tuesday July 7, 7:14 pm Eastern Time Yahoo! to kick off Internet earnings reporting season By Andrea Orr PALO ALTO, Calif., July 7 (Reuters) - Internet stocks, which have been soaring for weeks largely on speculation that they have sunny futures, will get a dose of reality Wednesday when Yahoo! Inc. reports second-quarter earnings. The Web navigation company is the biggest of the Web services and the first major Internet business to release second-quarter numbers this year. Its report will provide some hard data in an industry where companies' performances are often a matter of interpretation. Still, industry analysts say even the earnings of companies like Yahoo! will be hard to interpret. With Internet stocks already grossly overvalued by conventional measures, it is not clear what kind of results investors are looking for. Yahoo! has built a strong brand and a loyal following among Internet users, but its stock performance is nonetheless hard to fathom. Since its last earnings report in April, Yahoo!'s stock price has doubled. Its price Tuesday of $191 is 10 times the $19 a share at which it went public on May 31, 1996. ''It's not clear how much anticipated good news is already in the stock,'' said Andrea Williams, an analyst at Volpe Brown Whelan. ''Stocks are likely to be volatile one way or the other on the earnings reports. It's just hard to tell which way.'' Yahoo! is one of the few Internet businesses that has made any money at all, although this quarter the Santa Clara, Calif., company is expected to show a net loss due to charges from its recent purchase of the electronic commerce software company Viaweb Inc. But the outlook for Yahoo!'s operating results excluding charges is strong. Analysts are forecasting operating income of 9 cents a share, up from 1 cent a share, according to the First Call research service. And several analysts say privately they expect Yahoo! to beat that average forecast by at least 2 cents a share. Yahoo!'s stock fell $8.25 to $191 in Nasdaq trading. Because most interest in Internet stocks is rooted not so much in current performance as in long-term potential, the company's bottom line is not what analysts are looking at. Along with earnings they say they will be closely watching sales growth, as well as measurements of how well Yahoo!'s sprawling Web site is doing like ''page views,'' which measures the average number of people who view Web pages in a given day. Other key gauges are ''reach,'' the percentage of Internet users viewing a company's Web pages at least once a month, and the number of registered users, who sign up to use a given site. One of the most impressive elements of Yahoo!'s first quarter earnings, for instance, was that its Web pages had averaged 95 million page views a day, up from 65 million in March. ''I would think people would expect that the growth rate (in page views) this quarter might not be as high,'' said Abishek Gami, an analyst with William Blair and Co. in Chicago. Like many businesses, the Internet business is seasonal, Gami explained, and during the summer months fewer people stay inside to surf the Net. Other data of interest in the upcoming earnings report will be the number of advertisers on Yahoo! sites (last quarter it was 1,600); and the cost of advertising sold. Last quarter, Yahoo!'s ad rate was about $25 per thousand page views. ''If it fell dramatically all of a sudden to $22 or $23, that would be a red flag,'' said Volpe Brown's Williams.