Yahoo! flies high in Q3

Yahoo! has posted strong Q3 results, with net income more than doubling to $65.3 million, thanks largely to the health of its marketing services sector.

Net revenues for the quarter were $356.8 million, up 43 per cent from the same period last year, when it brought in $248.8 million. One of the strongest engines for growth at the Internet giant was marketing service revenue, including sponsored search revenues, which soared more than 48 per cent on last year, reaching $254.1 million.

Terry Semel, chairman and CEO of Yahoo, pointed out that, compared to last year, the company saw double digit increases in each of its three line items -- marketing services, fees, and listings -- but both fees and listings were a distant second and third place compared to marketing services revenue. Revenues from fees for the quarter totalled $79.4 million, a 38 per cent increase on the same period last year.

The company says these increases were due to the increasing number of customers paying for services such as SBC Yahoo!, the DSL and dial-up Internet service Yahoo! offers with SBC Communications, personals and business and communications services.

Listings revenues, meanwhile, totalled $32.4 million, a 26 per cent rise year-on-year. Yahoo! attribute the growth in listings over the past nine-month period mostly to revenues from HotJobs, which the company acquired in February last year, as well as increases in search and marketplace services revenues.

"Our client base really says it all: we are supported by hundreds of blue chip traditional marketers, thousands of small and medium-sized businesses, and millions of consumers around the world," said Susan Decker, CFO of Yahoo! Third quarter success augurs well for future progress, she added.

Yahoo! had 4.2 million unique paying subscribers at the end of the third quarter, which it expects to raise by between half a million and 700,000 in the current quarter.

In its outlook for the fourth quarter, Yahoo has forecast operating income before depreciation and amortisation of between $130 million and $150 million. It expects its fourth quarter revenue to fall within a range of $462 million and $502 million, excluding traffic acquisition costs, representing the costs of its recent acquisition of Overture. Yahoo! on Tuesday announced that it had completed its purchase of the commercial search company, which claims relationships with more than 100,000 advertising clients.

For the full fiscal year, Yahoo! raised its guidance and is now expecting operating income (before depreciation and amortisation) of $428 million to $448 million, on revenues of between $1.42 billion and $1.46 billion. The company had previously forecast operating income of no more than $400 million on revenue of up to $1.31 billion.

© ENN