There are two things you need to know about Yahoo!
Yes, as in its September quarter, hefty realized gains after selling its stake in Google
The Yahoo! you can rely on from here on out earned just $0.13 a share, but that was a dramatic improvement over last year's nickel showing. Revenues before its traffic acquisitions costs surged 54% higher, while free cash flow nearly tripled to $251 million.
The results capped a strong year in which earnings doubled to $0.36 a share with free cash flow clocking in at a healthy $844 million. Clearly online advertising has been very, very good to Yahoo! Not to belittle the company's sticky portfolio of properties, which include dating, premium email, and job placement services, but the company's subscription and listing revenues accounted for just 15% of the company's top line this past quarter. Web ads are behind the wheel here, and that's not the dangerous driver that may find you reaching over to fasten your seatbelt.
Last month I went over the many benefits of targeted online advertising over traditional marketing alternatives. While we may marvel at the evolution of television commercials now that companies such as Campbell Soup
That's why Yahoo! is doing so well as sponsors realize that Web-enabled eyeballs matter again. Fellow dot-com traffic hubs such as Google, InfoSpace
So it's OK if Yahoo! didn't really earn that quarter this time. There are more of those where that came from in the years to come in this prime Rule Breaker real estate.What did you think of Yahoo! and its fourth-quarter report? Is the online ad market more or less susceptible than traditional marketing channels? All this and more -- in the Yahoo! discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz does Yahoo! but that doesn't mean that he is buying it breakfast or adding it to his portfolio. He does not own shares in any company mentioned in this story and he is a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its stage of defiance.