Yahoo surprised even the most optimistic analysts when it grew by 191 percent and made $8.1 million profit in its second quarter.
Wall Street has seen a burst of feverish trading in Internet stock in recent weeks. But while most Internet-related shares have soared despite financial results, Yahoo set itself apart on Wednesday by posting strong numbers and showing itself to be in solid financial health.
Yahoo had turnover of $41.2 million for its second quarter, up 36 percent over the previous quarter and up 192 percent over the same period last year. After a charge of $44.1 million to cover in-process R&D related to the acquisition of ecommerce company Viaweb, Yahoo incurred a $36.0 million net loss.
Yahoo also announced that traffic on its Web site grew from on average 95 million page views a day in March to 115 million page views a day in June. The company claimed it now has 40 million regular users, 18 million of whom took the trouble of registering.
This base of 18 million registered users, up 50 percent from three months ago, will allow Yahoo to offer advertisers and online merchants new ways of targeting specific classes of users, president and chief executive Tim Koogle said.
Yahoo is currently the number one Web destination for work users, and second to AOL for home users, according to data from Mediametrix.
The usage growth was due in part to international expansion. In the quarter, Yahoo launched Chinese, Spanish and French versions of its service.
The usage numbers suggest Yahoo was not adversely affected by the termination of its agreement with Netscape. Since 1 June, competing Internet search company Excite has been Netscape?s preferred partner, in a deal valued at $70 million.
The acquisition of Viaweb will allow Yahoo to attract more online merchants to its site by offering to create, host and manage their online stores for them, said Yahoo founder Jerry Yang.
Yahoo claims that 1,270 businesses are currently selling their wares on its Web site. Yang said turnover from ecommerce were 26 percent of overall turnover in the second quarter - up from 22 percent in Q1. However, commerce revenue is still mainly from advertising bought by merchants, rather than a share in online sales transactions, Jerry Yang conceded.
Meanwhile, the number of advertisers on Yahoo rose to 1,800 from 1,600 over the quarter. However, Yang also warned that third quarter results may be affected by the seasonal weakness that the advertising market generally sees in the summer months.
Other Yahoo announcements on Wednesday included: a two for one stock split, effective on 3 August; a private placement of 1.36 million newly issued shares with Softbank, raising $250 million, to help Yahoo finance its growth; and a plan to increase brand awareness by using traditional media such as printed magazine Yahoo Internet Life and launching Yahoo-branded merchandise.
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