Yahoo reports 4th Quarter Earnings

Yahoo's fourth quarter profit rose to $75million (11 cents/share) compared to $46.2 million in 2003 (eight cents/share). Their 62% increase in profits for this quarter is largely driven by Yahoo's expansion into online search advertising.

Revenue more than doubled compared to last year's fourth quarter earnings with online advertising accounting for 82% of the revenue. This marked the seventh consecutive quarter that Yahoo's results have improved from last year. These revenue gains are largely attributed to Yahoo's $1.8 billion acquisition of Overture Services, Inc. in early October of 2003.

Overture delivers relevants ads to search engines via its commercial database. Overture's service has become one of the most popular methods of advertising on the Web, which has provided quite a boost to Yahoo.

The advantages of owning Overture "are even more compelling that we initially though," said Yahoo's Chief Financial Officer Susa Decker during a conference call with analysts.

These fourth quarter earnings capped Yahoo's most profitable year since the company was founded by Stanford University students Jerry Yang and David Filo nearly ten years ago as an online directory.

In 2003, Yahoo earned $237.9 million on revenue of $1.6 billion, up from a net income of $42.8 million on revenue of $953 million in 2002.

Aside from reporting earnings that exceeded analyst expectations, Yahoo's Chairman Terry Semel announced during an interview that Yahoo will end it's relationship with Google within the next 2 1/2 months. At that time, Yahoo's search engine results will be driven by Inktomi, which is acquired last year for $280 million.

2004