Yahoo Said It More Than Doubled Profit

Rhett Pardon
NEW YORK — More consumers are using the Internet and advertisers are rushing to market products to them.

That is the indication Internet bellwethers are expected to report in yet another quarter of strong revenue and earnings growth.

Yahoo Inc. said Wednesday that second-quarter net income and revenue more than doubled, driven by the Internet company's online advertising and consumer-service businesses.

The company said net income rose to $112.5 million, or eight cents a share, from $50.8 million, or four cents, in the year-earlier period. Revenue rose to $832.3 million from $321.4 million.

The Sunnyvale, Calif., company has been a key beneficiary of all the major consumer trends conducted over the web, including users' increased willingness to pay for online services.

Advertising revenue, growing at a rate of about 30 percent, is propelling the search engine. Growth is expected to be driven both by the search-term generated, targeted text ads that Yahoo's Overture unit displays on its and other sites' web pages, and by the "brand" ads, such as banners.

Smaller companies, such as DoubleClick Inc., Ask Jeeves Inc.,, ValueClick Inc. and aQuantive Inc. are also benefiting from the boom in online advertising.

And many of the search engines have gone on buying sprees, acquiring companies that have paid off.

Ask Jeeves in May doubled its search-query traffic with its acquisition of Interactive Search Holdings Inc., the Irvington, N.Y., operator of the My Way, My Search, My Web Search, iWon and Excite Web properties.

The purchase strengthened the Emeryville, Calif., search engine's bargaining position with Moutain View, Calif.-based Google Inc.

More than half of Ask Jeeves's revenue comes from text ads placed on its pages by Google.

Last month, aQuantive, which creates online marketing campaigns, agreed to buy website design company SBI.Razorfish.

That purchase broadens the Seattle company's menu of online-marketing services and brings in a number of large clients, including such heavyweights like Visa International and Kraft Foods.