Yahoo! and Broadcast.com Blast Past Expectations

Leading portal site Yahoo! (Nasdaq: YHOO) continued its run of exceeding Wall Street’s expectations when it announced its second-quarter earnings on Wednesday after the U.S. stock markets closed.

Yahoo! reported net revenues of more than $115 million (US$), a 156 percent increase over the same period last year. The company’s net second-quarter loss, including merger-related charges, was more than $15 million, or seven cents per share.

Net income for the quarter was more than $28 million, or 11 cents per share, excluding merger-related charges. That was three cents higher that the consensus estimate of analysts polled by First Call. Yahoo! has now topped analysts’ expectations for nine consecutive quarters.

Yahoo!’s Reach Expands

Yahoo! also reported growth in terms of audience reach. In June, more than 80 million unique users visited Yahoo!’s online network, and the company’s registered user base grow to more than 65 million unique users. The combined reach of Yahoo! and Geocities — which Yahoo! recently purchased for about $4.6 billion — among home and work users increased to 59.7 percent in the United States in May, according to Media Metrix.

Meanwhile, traffic on Yahoo!’s sites, which now includes traffic on Geocities, increased to a worldwide average of 310 million page views per day in June, up from 235 million page views per day in March.

“During the second quarter, we expanded our audience, our extensive global presence, the content and services we offer, the platforms and devices on which they are delivered, and the marketing programs we offer our customers,” said Tim Koogle, Yahoo!’s chairman and CEO. “The GeoCities, Broadcast.com, Online Anywhere, and Encompass acquisitions support our strategy to further strengthen our leadership in these areas…”

Broadcast.com Also Beats Expectations

In related news, streaming-media company Broadcast.com, which is waiting for shareholder approval of a $5.7 billion merger deal with Yahoo!, also beat Wall Street’s expectations when it announced its earnings after the markets closed on Wednesday.

Broadcast.com reported revenue of $13.5 million for the second quarter, an increase of 130 percent compared to the same period last year, and a 31 percent increase over the first quarter. The company had a second-quarter net loss of $1.9 million, or five cents per share.

“We continue to expand our turnkey business-to-business Internet broadcasting services, as we delivered 960 events in the second quarter of 1999, more than double the number of events in the second quarter of 1998 and a 45 percent increase over the first quarter of 1999,” said Todd Wagner, CEO of Broadcast.com. “…As we approach the July 20, 1999 special meeting of Broadcast.com stockholders to vote on the proposed merger with Yahoo!, we look forward to leveraging their position as one of the Web’s leading global branded networks to extend our audio and video programming and business-to-business solutions to an even larger customer and audience base.”

Stock Impact

Shares of Yahoo! closed down 8-1/16 to 167-1/16 prior to the news on Wednesday, but the stock began climbing in after-hours trading after the company announced its results. Shares of Yahoo! opened at 173 13/16 today.

Shares of Broadcast.com closed down 6-1/16 to 128 7/8 on Wednesday. The stock opened at 134-3/4 today.

Yahoo!’s second-quarter success could boost the entire Internet sector. Yahoo! is the first Internet company to report second-quarter earnings, and its standout quarter might be a sign of good things to come from the other Internet companies that follow.

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