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Yahoo Reports Twofold Increase In Profits

Yahoo says earnings more than doubled in the first quarter, as revenues from online advertising and other marketing services rose 54 percent.
Yahoo Inc. on Tuesday reported that earnings doubled in the first quarter, as revenues from online advertising and other marketing services rose 54 percent.

The Internet portal giant said net income for the quarter ended March 31 was $205 million, or 14 cents a share, compared with net income of $101 million, or 7 cents a share, for the same period in 2004. Revenues increased to $1.17 billion from $758 million a year ago.

"Yahoo entered 2005 on a high note, delivering strong growth and record revenue for the eighth consecutive quarter, further validating the strength of Yahoo's business model," Terry Semel, chairman and chief executive of the Sunnyvale, Calif., company, said in a statement. "We are on the cusp of witnessing a significant increase in engagement of consumers on the Internet and believe we are best positioned to capitalize on the many opportunities to which we are exposed."

Online advertising and other marketing services revenues rose to $1.03 billion in the quarter from $665 million a year ago, the company said. Fees revenue increased 61 percent to $149 million from $93 million a year ago.

"In the first quarter, Yahoo continued to grow its user base and drive deeper engagement, the core user fundamentals that lead to favorable financial returns," Susan Decker, chief financial officer for Yahoo, said.

The online advertising market, a key revenue driver for Yahoo and rivals Google Inc. and Microsoft Corp.'s MSN, remains strong, totaling near $9.6 billion in 2004, a 32 percent increase over 2003, according to the Interactive Advertising Bureau.

More than two thirds of Yahoo's revenues were from its U.S. operations, which brought in $819 million, a 37 percent increase over $599 million a year ago. The company's international revenues, however, grew at a faster clip, increasing 124 percent to $355 million from $159 million a year ago.

Cash flow from operating activities was $386 million, a 63 percent increase over $236 million a year ago.

Yahoo raised its revenue projection for the year, forecasting between $3.57 billion and $3.72 billion.