Yahoo's Profits More Than Double

By: Mark Hachman
10.19.20100 comments

Yahoo's third-quarter profit more than doubled from a year ago, and the Web property's revenue rose slightly.

Yahoo earned $396 million on revenue of $1.60 billion, a 113 percent boost in profit from a year ago, and a 2 percent increase in revenue. Yahoo's earnings also included a one-time gain of $186.3 million from the sale of HotJobs to Monster.com.

"We delivered a solid quarter with good display advertising revenue growth, big gains in operating income, and margins that were double what they were last year," said Carol Bartz, president and chief executive of Yahoo, in a statement. "Because we recognize the tremendous value of our assets, we also dramatically stepped up our stock repurchases. We've now bought back more than 7% of the company's stock this year alone."

Services revenue increased four percent, but fees revenue dipped by 15 percent. Marketing services revenue from Yahoo owned and operated sites climed to $877 million, versus $851 million for the same period a year ago. The marketing services revenue from affiliated sites was $557 million, up 6 percent from $526 million a year ago.

Yahoo also received $81 million in search operating cost reimbursements from Microsoft under the company's search alliance.

Revenue excluding traffic acquisition costs for thr fourth quarter is expected to be about $1.13 billion to $1.22 billion, Yahoo said. The revenue forecast assumes that the Microsoft-Yahoo paid search transition to Microsoft's adCenter platform will be completed by the end of October, Yahoo said. At that time, Microsoft will be entitled to 12 percent of the revenue (after traffic acquisition costs) for those Yahoo owned and operated sites that have been transitioned. That will work out to about a $30 million payment to Microsoft, Yahoo said.

In September, Yahoo was the number-two search site behind Google.

http://www.pcmag.com/article2/0,2817,2371112,00.asp