Yahoo! spins web magic
The Internet giant gave cranky investors what they wanted. Is it enough to revive the stock?
April 19, 2005: 5:14 PM EDT
NEW YORK (CNN/Money) - Yahoo! kicked off the Internet sector's earnings season Tuesday with strong evidence that recent jitters over the state of the online advertising market appear overblown.
Beating Wall Street estimates and raising guidance for the current quarter and full year was crucial for Yahoo. The company's stock price has been hammered so far this year on investor worries over mounting competition in the Internet ad sector and concerns that the prices paid for sponsored search, the fastest-growing segment of the on-line ad market, had softened.
Mark Mahaney, an analyst with American Technology Research, said that Yahoo's doubling of profits and 49 percent revenue increase in the first-quarter compared to last year's quarter suggested that investors don't have much to worry about.
"It looks like a very strong beat-and-raise quarter," said Mahaney. "Search revenues were particularly strong."
Yahoo (Research)! stock has fallen nearly 14 percent since the since the start of the year on investor worries over mounting competition in the Internet ad sector and concerns that prices for paid search ads had softened.
Shares in the Sunnyvale, Calif-based Internet giant surged nearly five percent within minutes of Yahoo's announcement that first-quarter revenues and profits topped analysts' forecasts.
Yahoo's rosy earnings report also portends well for arch rival Google, which reports Thursday. Google shares are down three percent year-to-date. Of the six main players in the Internet search market, only shares in Ask Jeeves and Aquantive are trading above January 1 levels.
Google's (Research) stock price jumped more than 3 percent after Yahoo! announced Tuesday afternoon.
Fonte: cnnfn