Financial services company Piper Jaffray this week issued a bullish report on Yahoo!, stating that its previous estimate of 27 percent revenue growth for the company in 2006 was "likely to be
conservative," given the boom in online advertising.
A report by Piper Jaffray Senior Research Analysts Safa Rashtchy and Aaron M. Kessler stated that Yahoo! "has been steadily
increasing its monetization since 2003" and should be able to "narrow the gap with Google and continue to post strong growth."
The report specifically pointed to Yahoo!'s strength in
capturing online branding dollars. "We believe the lion's share of this spending is likely to continue to go to Yahoo!" concluded the report.
Piper Jaffray noted that Yahoo! intends to
expand content and entertainment, including Yahoo! music, for which the company will undertake a "major marketing campaign" this quarter.
Yahoo! last week reported that quarterly revenues
rose to $875 million (excluding traffic acquisition costs). Though that figure was 44 percent more than last year's second quarter revenue, it was lower than the $882 million analysts had
expected.