Search and Ads Drive Blockbuster Yahoo! Earnings

  |  October 8, 2003   |  Comments

Revenues from paid search and branded advertising increase nearly 50 percent, as Yahoo! easily beats analyst expectations.

Yahoo reported big demand for its branded advertising, combined with continued strong growth in paid search, helped it achieve healthy profits in the third quarter.

Marketing services, which encompass both search and regular online advertising, grew 48 percent from the same period a year ago, accounting for $245.1 million in revenue. The company credited strong demand for its ad products from Fortune 500 advertisers running large-scale campaigns and from tens of thousands of smaller advertisers who run keyword campaigns through recently acquired Overture Services. Branded advertising grew 20 percent. Yahoo did not break out search's contribution.

The strong demand drove blockbuster results for the Sunnyvale, Calif.-based company. Revenue for the quarter was $356.8 million, a 43 percent increase from a year ago. Net income was $65.3 million, or 10 cents a share, more than double the profits from the year before.

The results blew past analyst expectations. Those polled by Thomson/First Call expected $337.8 million in revenue and 9 cents in earnings per share.

"We believe Yahoo, with its large and loyal audience and our ability to offer services along the marketing continuum, is well-positioned to capitalize," on growth in online advertising, said Terry Semel, Yahoo's chief executive.

Semel said Yahoo's online advertising was helped by strong demand from traditional advertisers in industries like pharmaceuticals, automotive and entertainment.

"Many of our large clients are spending more money with Yahoo as they experience how online advertising can contribute to the effectiveness of their campaigns," he said.

The company's non-marketing areas also performed well. Sales in its fees business, which includes premium services and its broadband deal with SBC Communications, rose 38 percent to $79.4 million. Yahoo added 700,000 paying customers in the quarter, reaching 4.2 million. The co-branded broadband offering with SBC was the largest contributor, Semel said.

Sales in Yahoo's listings business, which includes HotJobs, rose 26 percent to $32.4 million.

Looking ahead, Yahoo upped its earnings guidance. The company re-jiggered its revenue reporting to take into account Overture's traffic acquisition costs (TAC), which are the amount it pays to sites for distributing its paid listings. Yahoo expects revenue without TAC to be between $462 million and $502 million.

ClickZ Live New York What's New for 2015?
You spoke, we listened! ClickZ Live New York (Mar 30-Apr 1) is back with a brand new streamlined agenda. Don't miss the latest digital marketing tips, tricks and tools that will make you re-think your strategy and revolutionize your marketing campaigns. Super Saver Rates are available now. Register today!

ABOUT THE AUTHOR

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

5 Ways to Personalize Beyond the Subject Line

5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.

WEBINARS

    Information currently unavailable

Jobs

    • Creative Project Manager
      Creative Project Manager (Agora Inc. ) - BaltimoreThe Creative Project Manager of PubSVS will work directly with the IRIS team and will be responsible...
    • Digital Marketing Associate
      Digital Marketing Associate (Connections Media) - Washington, DCConnections Media, LLC, a Washington, DC-based digital agency providing strategy...
    • Digital Marketing Specialist
      Digital Marketing Specialist (The Oxford Club) - BaltimoreThe Oxford Club is seeking a talented writer/marketer to join our growing email lead...