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Yahoo Profit Rises on Ads

October 09, 2003|James Bates | Times Staff Writer

Yahoo Inc. continued on a roll in the third quarter as earnings more than doubled thanks to a boost in online advertising by major companies.

The Sunnyvale, Calif.-based Internet company on Wednesday also once again raised its financial projections. Yahoo said it expects revenue for 2003 to be as high as $1.46 billion, compared with its previous estimate of $1.31 billion.

Yahoo logged a profit of $65.3 million, or 10 cents a share, for the quarter ended Sept. 30 as revenue jumped 43% to $356.8 million. A year earlier, Yahoo earned $28.9 million, or 5 cents, on revenue of $248.8 million.

The earnings announcement follows the closing of its $1.8-billion cash-and-stock deal to buy Overture Services Inc., a Pasadena company that has been a major contributor to Yahoo's turnaround. Overture developed a system in which advertisers pay for prime space in search engine results.

Yahoo Chief Executive Terry Semel said two-thirds of the top 100 advertisers as measured by Advertising Age are now advertising with Yahoo. Semel said film studios, automakers, packaged goods, financial, technology and telecommunications companies have been especially strong advertisers.

"This has really been coming alive," Semel said.

Analysts had expected earnings of 9 cents a share, according to Thomson First Call.

"It was a terrific quarter," said Mark Zadell, analyst at Blaylock & Partners in New York. "What's really impressive is the acceleration in traditional branded advertising."

Yahoo shares fell 14 cents to $38.79 on Nasdaq, before the announcement.

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