Yahoo posts $907m revenue in third quarter

Yahoo significantly increased its revenue and earnings in its third quarter, the result of new products and services boosting the...

Yahoo significantly increased its revenue and earnings in its third quarter, the result of new products and services boosting the company's advertising business.

Compared with last year's third quarter, Yahoo's revenue grew 154% to $907m (£503m). Meanwhile, net income rose to $253.3m from $65.3m.

Excluding a one-time gain related to an investment sale and a resulting tax benefit, Yahoo's net income came in at $124m, meeting the consensus expectation from analysts polled by Thomson First Call.

Excluding traffic acquisition costs, which are revenue shared with and paid to affiliates of Yahoo's Overture unit, revenue came in at $655m, exceeding analyst consensus expectations by $11m.

Overture, which Yahoo bought in October 2003, sells online ads that run in a network of websites. Based on context, Overture matches the ads with web pages in the network. The ads are also matched to search engine queries.

Yahoo saw its US revenue increase 118% to $655m, while international revenue shot up 341% to $252m.

Unique users totaled 325 million, compared with 300 million in the second quarter and 245 million in 2003's third quarter.

Yahoo increased its forecast for the year for revenue excluding traffic acquisition costs to between $2.51bn and $2.56bn. The company expects revenue excluding traffic acquisition costs to be between $710m and $760m in the fourth quarter.

Yahoo's headcount increased to 7,022 employees during the quarter, up from 3,976 in 2003's third quarter.

Juan Carlos Perez writes for IDG News Service

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