Yahoo Inc., the first major Internet company to report third-quarter results, outdid itself today by beating even the unofficial "whisper" estimates for earnings and revenue growth.
Chief executive Tim Koogle credited part of the increase to the portal's rapid global expansion. "We've got much farther to go, but it's a pretty good footprint," he said in an interview.
More than a third of the Web site's users come from outside North America, Koogle said, adding that Yahoo is No. 1 in Britain, Italy, France, South Korea and Japan.
Yahoo's revenues in the third quarter were $155 million, more than double the $66.3 million of a year ago and about 10 percent more than analysts' expectations. Earnings on a pro forma basis were $40.4 million (14 cents a share), up from $6.9 million (2 cents) last year.
The consensus earnings estimate, according to First Call, was 9 cents a share. The "whisper" number was 12 cents. Yahoo has traditionally beaten the estimates, so any failure to do so would have inflicted pain on the stock.
The profit after including charges related to acquisitions was $14.9 million (5 cents), compared with $4.25 million (1 cent).
Yahoo, which started as a simple guide to cool Net sites by two Stanford University graduate students, is aiming to become a sort of one-stop site for Internet users, combining information, personalized news, community, shopping, banking and auctions.
The remarkable thing, said Koogle, is that it's succeeding at becoming this even though its users "have a choice."
"They don't have to use Yahoo because they get it bundled with their Internet access. They choose to use it," he said.
Yahoo makes its money through advertising and by operating as what it calls a "commerce enabler." More than 7,000 merchants pay to sell their wares on Yahoo's site. It's a growth area of e-commerce but, as Amazon.com's announcement of its zShops last week shows, an increasingly crowded one.
Koogle said he was "not really" worried about Amazon. "The number of consumers and the amount of commerce is big enough to support a number of large players," he said, noting that Yahoo, unlike Amazon, doesn't directly compete with its own retailers.
"Unique" Yahoo users--those who accessed at least one Yahoo page during the quarter--went from 80 million in the second quarter to 105 million in the third quarter. Registered users, who are more intimately involved with the site, rose from 65 million to 80 million. Average daily page views for the Yahoo network went from 310 million to 385 million.
"This was clearly a much better quarter than expected," said Andrea Williams, an analyst with E-Offering. "Given Yahoo's size, everyone was concerned that growth would be slowing. We clearly did not see that."
Analysts also had been worried that usage would have slacked off because people tend to abandon their computers in the warmer months. And Yahoo spent the quarter integrating two big acquisitions, the community site GeoCities and Broadcast.com.
Yahoo stock, which peaked at $244 in April, bounced up $2.43 3/4 a share today to $175.75. Tech stocks were strong partly because of excitement about Yahoo's earnings, which were reported after the market closed. In after-hours trading, it gained as much as $8 a share.
CAPTION: Yahoo co-founder Jerry Yang joins Madeleine K. Albright at company headquarters in Santa Clara, Calif., yesterday as the secretary of state uses Yahoo facilities for an online meeting with El Salvador's foreign minister.