Fuelled by growth in its internet advertising business and paid services, Yahoo has reported its largest revenue producing quarter in company history.
The company reported net income of $50.8m (£31m) on net revenue of $321.4m (£197m) for quarter ending 30 June.
Net revenue was up 42% over the $225.8m it reported a year ago. Net income was also up from last year's $21.4m.
The good results this quarter were a result of more balanced growth in advertising and sponsored search revenue, and the conversion of consumers and small businesses to fee-based services from free ones, the company said.
"More marketers are recognising that the internet is a great complement rather than a replacement for traditional forms of advertising such as television," said chief executive officer Terry Semel.
Growth in this area was also driven by industry standards like the Universal Ad Package sizes now promoted by the Interactive Advertising Bureau.
Programmes aimed at enticing advertisers in specific vertical markets like the automotive, retail and entertainment industries are also beginning to bear fruit, Semel said. The number of motion pictures promoted by Yahoo in the quarter, for example, jumped from 13 a year ago to 53 in 2003.
Revenue from Yahoo's marketing services, which include sponsored search and advertising via Yahoo's global marketing services, accounted for $219.2m (£134m), the bulk of Yahoo's revenue.
Fee-based services, including premium services such as Yahoo Personals and SBC Yahoo DSL (Digital Subscriber Line) accounted for $69.9m (£41m) in revenue, a 43% increase over 2002.
The company reported that 3.5 million users now pay for Yahoo services, making it the most rapidly growing group within Yahoo. The total global audience reached by Yahoo is now 236 million users - up from 196 million a year ago, said Semel.
Yahoo is now less certain about its full-year 2003 revenue estimate, widening the range between $1.26bn (£77m) and $1.31bn, according to executives. It had earlier estimated full-year earnings at $1.28bn.
Robert McMillan writes for IDG News Service