OUR TAKE

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	Discussion Boards The Motley Fool Take Yahoo!

By Rick Aristotle Munarriz (TMF Edible)
July 11, 2002

It's the dot-com revolution, version 2.0. Moving away from the Internet bubble model where online advertising, eyeballs, and clickthroughs were all that mattered, Yahoo! (Nasdaq: YHOO) continues to make strides in making the Web pay. Literally. With its first quarterly profit in nearly two years, the company saw revenue climb by 24% and is upping its guidance for the full year.

Thanks to the successful rollout of new premium services and the acquisition of the HotJobs.com career-placement site, the company continues to wean itself off site sponsors. Non-advertising revenue is now up to 40% of the Yahoo! top-line pie.

But it's not as if the tollbooths are coming down all over the information superhighway. While the popular portal claims 238 million registered users, just one million are paying customers. But think about it. A million users paying an average of $10 a month is pretty hearty. Not only is the company expecting the billable headcount to double by the end of the year, but that number will still be less than 1% of its registered user base.

The company posted June quarter earnings of $0.03 a share on revenue of $225.8 million. That topped expectations of a $0.02-a-share profit on a $215 million top-line showing. For all of 2002, the company now expects revenue to come in as high as $940 million. Selling the Internet as a haven of free stuff was easy, but earning the right to charge for its services has proven to be the ultimate act of success.

How do you feel about Yahoo! and its premium services? What will you pay for online? What will you not pay for online? All this and more -- in the Yahoo! Discussion Board. Only on Fool.com.

 

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