Yahoo! Earnings Bolstered By Strong Ad Market

A robust online advertising market helped Yahoo! earn strong profits and revenues in the third quarter of this year, the company reported Tuesday after markets closed.

Revenue for the quarter was $1.33 billion--a 47 percent increase over the $906.7 million it reported in the third quarter of last year. Net revenue, excluding traffic acquisition costs--revenue that Yahoo! shares with affiliates like MSN, which uses Yahoo!'s SEM technology--increased 42 percent to $932 million.

Net income for the quarter was $254 million, compared to $253 million in the third quarter of last year. Marketing services revenue grew 46 percent to $1.16 billion from $797 million in third-quarter 2004.

In July, Yahoo! had predicted third-quarter net revenue--excluding traffic acquisition--of $880 million to $930 million. The Sunnyvale, CA-based company also forecast revenue of $3.6 billion to $3.7 billion for the entire year. On Tuesday, the Internet company increased its full-year forecast to $3.66 billion to $3.71 billion, and estimated fourth-quarter net revenue of $1.03 billion to $1.08 billion.

Yahoo! also reported closing the quarter with 191 million active registered users--a 22 percent increase above the 157 million it accounted for last year at this time. Among those users, 11.4 million actually subscribe to Yahoo!'s premium services--which amounted to $170 million in fees, Yahoo! said.

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