Yahoo! goes yippie in Q3

Summary:Yahoo! Inc. again confounded the naysayers who predicted the Internet start-up would run out of steam by posting yet another better-than-expected quarter.

Yahoo! Inc. again confounded the naysayers who predicted the Internet start-up would run out of steam by posting yet another better-than-expected quarter.

Yahoo! returned a profit of $1.6 million, or 3 cents per share in its third fiscal quarter, on revenues of $17.3 million, far outstripping First Call predictions of a 1-cent-per-share profit on sales of roughly $15 million.

"It's really not that surprising," said Paul Noglows, an analyst at Hambrecht & Quist. "I predicted a profit of 2 cents per share, but I had a feeling they might beat that as well."

Last quarter, the Internet navigation site reported a profit of 1 cent per share, the company's first quarter in the black.

Wednesday also made a series of strategic announcements that analysts said would further solidify the Santa Clara, Calif., firm as the preeminent Internet guide.

Yahoo! announced it will take a $4 million charge in its fourth quarter for the acquisition of Four11, a privately held Internet directory service. It also inked distribution agreements with Compaq Computer Corp. and Gateway 2000 to deliver customized Yahoo! features on both PC makers product lines.

According to PC Meter, an online marker research firm, Yahoo! expanded its traffic to an average of 50 million page views per day during September, up from 38 million page views per day in June. The site had an unduplicated overall audience reach of 37 percent of U.S. Internet households and 45.2 percent of business users in August.

Yahoo! officials were ecstatic.

"We continued to experience strong traffic growth during out third quarter," said chief executive Tim Koogle in a prepared release. "We continued adding key new community and electronic commerce services and expanding distribution, further enhancing our comprehensive network of properties and services and filling a wide variety of user and advertiser needs."

Shares of Yahoo! closed up $1.13 per share to $56.88 before the results were announced.

"They're doing everything they can to attract the most eyeballs for advertisers," Noglows said. "It's clear that their strategy is working."

Topics: PCs, Hardware, Start-Ups

About

Larry Barrett is a freelance journalist and blogger who has covered the information technology and business sectors for more than 15 years. Most recently, he served as the online news editor for 1105 Media's Office Technology Group and as the online managing editor for SourceMedia's Investment Advisory Group publications Financial Pl... Full Bio

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