It's hard to argue with the recent success of Ask Jeeves
Last night, the Internet portal posted appetizing first-quarter results. Earnings per share more than tripled to $0.23 as revenues soared 73% to $39.2 million.
Next month, the company will close its acquisition of Interactive Search Holdings, a move that will ultimately double its market share. That's significant because virtual real estate has become the name of the game in paid search. That's right, those familiar eyeballs the dot-com market befriended matter again.
And paid search is the place to be. While the market anxiously awaits Google's debut, other companies that have cashed in on sponsored search have thrived. Yahoo!
For the year, Ask Jeeves is looking to produce $255 million in revenues. It is also guiding investors to expect $0.75 a share -- or a whole dollar on a pro forma basis -- in earnings. While the stock's gains make it hard to call it a bargain at these levels, the paid search tailwind is here to stay. Be on the lookout for any unjustified dips as a way to ride the waves.
Are the Internet stocks overpriced again? Are these reasonable valuations or do you smell bubble? How will the industry's top dog -- Yahoo! -- compete against Google? All this and more -- in the Yahoo! discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz has been a big fan of the online sector's revival, but he does not own shares in any of the companies mentioned in this story.