Yahoo! profits up, sees improved search share

Yahoo! profits up, sees improved search share
SAN FRANCISCO (AFP) – Yahoo! posted a quarterly net profit on Tuesday more than double that of a year ago and said it expected its share of the Web search market to improve after months of decline.

Yahoo! said first-quarter net profit rose to 310 million dollars from 118 million dollars in the corresponding quarter a year ago.

Revenue at the Sunnyvale, California-based Internet company increased one percent during the quarter to 1.6 billion dollars.

Adjusted earnings per share of 15 cents excluding Yahoo!'s sale of Zimbra and other items were better than the nine cents forecast by analysts.

"We had a good quarter, delivering income from operations higher than our outlook," Yahoo! chief executive Carol Bartz said in a statement.

"Thanks to our efforts, our search share has stabilized, and we grew display advertising by 20 percent year over year," said Bartz, who delivered her best quarter since taking over as CEO of Yahoo! a little over a year ago.

"We made important strides on several measures in the first quarter," Yahoo! chief financial officer Tim Morse said.

"Our operating income growth and expanded margins this quarter demonstrate the success of our efficiency efforts as well as the first tangible benefits of our search agreement with Microsoft," he said.

Yahoo! said its first-quarter results included reimbursement payments from its Web search partner Microsoft totalling 78 million dollars.

"We believe our search share has bottomed and will begin to trend upward in the second quarter," Morse added in a conference call with analysts.

Yahoo! saw a slight uptick in March in its share of the lucrative US Web search and advertising market, according to online tracking firm comScore, moving from 16.8 percent to 16.9 percent.

Google remained the overwhelming search leader although its market share fell slightly in March, to 65.1 percent from 65.5 percent in February.

Bing, the search engine of Yahoo!'s search partner Microsoft, increased its share of the US search market in March to 11.7 percent from 11.5 percent.

"There's a renewed energy among (Yahoo! employees) around search," Bartz said. "We have a lot of effort going this and really believe that we will not only drive volume up but share up."

Bartz said Yahoo! was planning to complete the transition to Microsoft's search engine "prior to the 2010 holiday season," starting with the United States.

"So far we're on track," Bartz said, adding that "we're not going to switch unless both of us decide it can be a quality transition."

Yahoo! forecast revenue of between 1.6 billion dollars and 1.68 billion dollars in the second quarter of the year.

Yahoo! shares were 3.97 percent lower at 17.65 dollars in after-hours electronic trading.

Apr 21, 2010 17:42

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