YAHOO! BLOWS AWAY WALL STREET

On Wednesday Yahoo reported first-quarter earnings that blew away Wall Street expectations, reporting profit for the three months ended March 31 at $101 million - 14 cents per diluted share on $550 million in revenue, excluding traffic acquisition costs (TAC).

Wall Street analysts expected Yahoo to report a profit of 11 cents a share on $497.9 million in revenue excluding TAC, according to consensus estimates from Thomson First Call.

TAC is the amount of money Yahoo subsidiary Overture Services pays toits distribution partners to host its commercial search results (such as MSN). Overture charges advertisers a price every time a user clicks on the link, giving its distribution partners a cut of the revenue. This is represented as TAC.

Yahoo focuses on revenue without TAC because it considers that figure a more accurate reflection of its business.

Revenue including TAC reached $758 million for the quarter.

"Yahoo's performance surpassed even our high expectations, delivering the most successful quarter in the company's history," Yahoo CEO Terry Semel said in a statement.

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