Yahoo! shows paid search pays

Record profits in Q1

Paid search and advertising revenue drove Yahoo! to a record first quarter, the company reported Wednesday.

Yahoo! pulled! in! a! stunning! $758m! in! revenue! for! the! period! This marks a 168 per cent jump over the $283m reported in the same quarter a year ago. Revenue excluding traffic acquisition costs (TAC) hit $550m compared to $283m in last year's first quarter.

TAC refers to the amount of money Yahoo! subsidiary Overture shells out to distribution partners to promote its search products. Overture pays outfits such as Microsoft's MSN a slice of revenue garnered from advertisers that pay for search ads.

In its first quarter, Yahoo! reported a profit of $476m and income of $132m. This compares to a profit of $240m and income of $55m in the same quarter last year.

"Yahoo!'s performance surpassed even our high expectations, delivering the most successful quarter in the Company's history," said Terry Semel, Yahoo!'s CEO.

Yahoo! brought in the majority of its revenue from marketing services. This group accounted for $635m - a 235 per cent jump over last year. Paid search being the big driver here. Yahoo!'s fees business results were a bit more modest. This group pulled in $88m - a 39 per cent year-on-year increase. This business includes Yahoo! premium services such as mail and storage. Listings revenue reached $34m - up 16 per cent.

With the strong results behind it, Yahoo! announced a two-for-one stock split. Investors on record as of 26 April will double their shares on 11 May. ®

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