Yahoo Q3 Profit Rises

Yahoo has posted a larger profit for Q3: a net profit of $65.3 million, compared with a year-earlier profit of $28.9 million. Revenue was $356.8 million, compared to $248.8 million in the year-ago period.

MarketWatch: Marketing services unit grew 48 percent to $245 million. Even the most optimistic projection for this unit — which includes Yahoo’s branded advertising and paid-search listings business — was for a 42 percent rise. Fee revenue, which includes Yahoo’s personals, e-mail services and co-branded SBC Communications Internet access, grew 38 percent, which also beat analysts’ forecasts. Listing fees rose 26 percent.

Conference call details: Sue Decker, Yahoo CFO: “We exited the quarter with approximately $4.2 million paid relationships up dramatically from $1.6 million a year ago and advancing more than 20 percent from Q2 levels. Growth was strong and balanced across content bundled with access, premium e-mail services, small business and various a la carte service offerings like personals and fantasy sports. In each of the last four quarters we were able to increase our paying subscriber base by 600,000 to 700,000. While these gains are significant, it’s important to remember that each of these periods contained either a contribution from migration of SBC subs as that service was initially introduced or a benefit from seasonal services such as fantasy sports which helped Q3 due to the overlap in baseball and football. Heading into the fourth quarter, we will begin to see a contribution from British Telecom, which should help to offset the losses of incremental paid subs from the SBC migration and fantasy sports in prior quarters and allow another 500,000 to 700,000 in incremental sub for the quarter. This should leave us approaching 5 million paid relationship by year end, nearly halfway to our longer term goal of 10 million. And well above the 4.2 to 4.5 million which was upwardly revised in our June quarter.” Average revenues per user has risen to 49 cents, up 18 percent year-over-year.

Terry Semel, CEO, answering a question on Yahoo Platinum: [he cleverly side steps the question] “the next thing we will going with is [the bundled] paid package to our users [which he explained is “Bring Your Own Access” kind of deals]. You’ve seen that a little of that on SBC Yahoo and BT Yahoo deals. At the same time, we always said we did Platinum to get some learnings…we did some terrific learnings. At the same time, we are doing some video trials with SBC Yahoo, which were built from experiences from Platinum. We have few of stand alone packages on the drawing board, and hope to launch these sometime next year.”

Related: Yahoo Platinum’s a Dud

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