HOLLYWOOD — Yahoo! reported its strongest earnings to date in the first quarter, with continued growth in the Internet advertising space helping revenues to nearly triple from a year ago, while net income more than doubled.
Company had net income of $101 million on revenue of $758 million, up from $47 million on $283 million in the same period last year.
Revenue particularly surged for the company in its marketing segment, up 235% over last year to $635 million. Company attributed that increase primarily to strong growth in advertising in its search and shopping categories, where advertisers pay to have their Web sites and products highlighted in response to user queries.
Performance reflects an overall boom in Net advertising, which increased 38% in 2003. Search has been a particularly hot space for netcos recently, with Yahoo, Microsoft and others trying to copy Google’s success. Yahoo’s acquisition of search advertising provider Overture last year has been a key growth driver in that category.
Along with the positive news for the first quarter, Yahoo is raising its guidance for the rest of the year. For the full year, it now expects revenue minus the traffic acquisition costs it pays partners to carry its search listings to be between $2.4 billion and $2.52 billion for the year, up from its previous prediction of $2.17 billion to $2.25 billion. Operating income is now predicted to be between $890 million and $970 million, while last quarter Yahoo said it would make operating income of $710 million to $800 million in 2004.
And with its stock nearly doubling in the past year, company announced a two-for-one stock split effective May 11.
Yahoo shares fell less than 1% Wednesday before earnings were announced, but immediately surged nearly 10% in after-hours trading on the news to more than $53.