Yahoo! has emerged from Q3 with a profit - of sorts. The company has posted a pro forma net income of $8.4m (Q3, 2000 $81.8m) on sales of $166.1m, a big slide on Q3 last time around when it raked in $295.5m.

However, the real net loss, which includes a writedown on investments of $17.1m was $24.1m, compared with real net income of $47.7m for the same period last year.

Yahoo!'s results show that it is by no means a busted flush. The company retains top slot worldwide "in terms of unique users, reach, and time spent". That's what Nielsen/NetRatings recorded in August this year.
The company's global audience of the quarter was 210m unique users, compared with 166m uniques same time last year. And the average traffic was 1.25bn page views a day in September.

The immediate challenge is to make decent money from this immense traffic. With the collapse in dotcom sentiment, the wholesale transfer of capital from VC houses to advertising outlets such as Yahoo! has dried up. That makes life much harder.

And any which way you look at it, Yahoo! is weaker financially and strategically than AOL and MSN, its two major rivals. ®