Shares in Yahoo! were up 6% in after-hours trading as the online media giant reported a solid quarter in line with guidance.
Revenue rose a healthy 34% in the first quarter at $1.57 billion, while net income fell 22% to $160 million.
While no new content initiatives, such as a videostore, are imminent, Yahoo! is in talks with a number of big media companies about distributing their content, CEO Terry Semel confirmed in a conference call with analysts.
“The big change for us as an industry is that prior to the last five or six months, lots of potential partners were coming to talk about not doing very much,” he said. “All of those partners today are coming to talk about what they might do with Yahoo!, and it’s very, very exciting.”
Marketing continues to dominate Netco’s mix, accounting for 88% of revenue last quarter. Not only are fees a small portion despite Yahoo!’s efforts to get money directly form its users, but fee revenue grew slower, up 25% compared to 35% for advertising.
Yahoo! is in the midst of a major upgrade to its search advertising capabilities, expected to launch later this year, that it hopes will create more opportunities for marketing revenue.
Guidance remains the same for the year, at $4.6 billion-$4.85 billion in revenue before costs paid to affiliates for traffic and $1.92 billion-$2.2 billion in operating income before certain costs.
Boost from earnings is a welcome change for Yahoo!, which has seen its stock fall 20% this year in the face of increased competition from Google and AOL.
Netco also has failed to move ahead on many of the content initiatives expected to come from media and entertainment topper Lloyd Braun. While reality series “The Runner” remains in development, company recently said Braun now won’t focus on costly original programming.
Shares in Yahoo! rose 1% to $31.30 before earnings were announced.