Yahoo's Turnaround Continues Apace

A fourth consecutive profitable quarter for the Web portal.
Yahoo Inc. made it four profitable quarters in a row, continuing its about-face after the tech wreck.

The company Wednesday reported earnings of $46.7 million, or 8 cents per share, for its first quarter. That's a big turnaround from a loss of $53.6 million, or 9 cents per share, for the same quarter last year. First-quarter revenue was $282.9 million, a 47% improvement over the $192.7 million tallied a year ago.

Yahoo, which posted a $92.8 million loss in fiscal 2001, says advertisers are willing to pay for prominent display in its search results, and subscribers are turning to its Web portal for high-speed Internet access. With that money, Yahoo is weaning itself from the unsteady flow of revenue generated by selling banner and other kinds of site ads.

Revenue categorized as coming from fees, which includes its Internet-access deal with SBC Communications Inc., rose 61%, to $63.7 million in the first quarter, ended March 31. Revenue from companies buying a top position in search displays was up 89%, to $29.3 million. Marketing-services revenue was up 38%, to $190 million.

Yahoo reacted to the 2001 ad slump by hiring former movie studio executive Terry Semel to reorganize the business, a move that seems to have paid off. Company execs expect more good times. They predict revenue of as much as $315 million in the second quarter.

During a conference call Wednesday, Semel said, "We intend to maintain our focus on providing the best experience on the Web, which we believe will lead to increased user engagement and, ultimately, greater success for our company."