Publishing and Broadcasting Ltd-Microsoft joint venture ninemsn has returned its first full-year profit since its launch around six years ago.
The company has recorded an AU$14.4 million profit and 51 percent year-on-year increase in revenue to AU$45 million for the 2004 financial year.
According to ninemsn chief executive officer, Martin Hoffman, the search portal's effort to reach profitability was a battle to achieve scale.
"You can see that from the economics of the way these businesses work that once you get above a certain scale they start generating very strong returns," said Hoffman.
According to Hoffman the shift to profitability was primarily being driven by strengthening demand for advertising on its portal.
He said the portal was now beginning to attract big brand name brand advertisers coming online now for the first time.
However, ninemsn still appears to be lagging behind when it comes to monetising search.
"Search is still growing strongly but that sort of market has really only started for us in the past year," said Hoffman.
Hotmail, messenger and conventional Web banners continue to be the portal's main source of advertising revenue while it relies on Yahoo Australia for its algorithmic and paid search services.
Hoffman said the company's plans to introduce its own search technology before the end of the year were still on track but it's still playing its card close to its chest when it comes to releasing details about the product.
The company claims its "seen no dip in active [Hotmail] accounts" numbers since rival Web mail providers, Yahoo and Google began offering generous e-mail storage quotas.