While most portals continue to struggle, Yahoo! has made profits after two years and has been able to sustain its free-services like e-mail, thanks largely to broadband sales and fee-based services like job listings to compensate for the slump in ad revenues.
The 1990s saw the mushrooming and ultimately the fading of many an Internet start-up. The very investors and venture capital firms who feasted on the soaring stocks have since shied away from the dotcoms. Many start-ups that enjoyed favorable valuations and record-setting IPOs are either in deep trouble today, or have gone bankrupt. However, even amid such chaos, a few companies have survived against the tide and Yahoo! may be deemed as one such bold start-up that refuses to bow down. Yahoo! was one of the first few players on the Internet offering a precise and concise search feature along with its hugely popular e-mail service. Like many other frenzied dotcoms it offered its services free of cost. That didn't matter at the height of the dotcom bubble as the advertising revenue more than made up for their operations. Today, however, advertisers no longer consider Internet as the ultimate media to reach their customers. More so, because the `clicks' and `eyeball' measures have largely lost their credibility and have become redundant. Further, the economic downturn has seen many advertisers slash their advertising budgets effecting Internet firms the most. But Yahoo! has beaten analysts' expectations to report profits for the first time in two years and the icing on the cakeits third quarter results for the current fiscal year, announced recently, are even better.
Yahoo! posted earnings of $28.9 mn, or 5 cents a share, compared with a loss of $24.1 mn, or 4 cents a share, in the same period the previous year. Revenues leapt 50% from $166 mn to $248 mn and the company forecasts that revenues for the year would be between $930 mn and $955 mn, compared with $900 mn-$940 mn that the company had previously forecast. Laudably, the shares closed up 5% at $9.98 in a falling market. Moreover, Yahoo! has no debt and requires no additional capital to develop the business. Revenues from the fees and listings business jumped 124% to $83 mn. Excluding HotJobs' revenues, they increased 66%.
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