SEARCH ADS CITED FOR YAHOO! REVENUE SPIKE

Earnings Double in Third Quarter

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NEW YORK (AdAge.com) -- Yahoo! reported its third-quarter earnings more than doubled, due to strong growth in the online advertising market, driven particularly by search-related advertising.

$1.6 billion segment
Sponsored search, whereby marketers pay

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to have their Web sites top Internet search result listings, is expected to be a $1.6 billion marketplace by year-end, according to Jupiter Research. Yahoo!'s $1.83 billion acquisition of Overture Services, the No. 2 search firm after Google, closed Oct. 8.

Third-quarter Revenue rose $356.8 million from $248.8 million, exceeding the company's own quarterly revenue forecast of $318 million to $338 million.

Yahoo! told analysts it expects to report full-year income from operations of as much as $286 million; the previous estimate was for no more than $260 million.

Selling more ads
Yahoo! executives said that apart from search, the company is selling more advertising and sponsorships on high-traffic areas of its site, including the front page and premium service areas such as personals and HotJobs. Large advertisers flocking to Yahoo! of late include Gap Inc., PepsiCo, Ford Motor Co. and movie studios.

In premium, for-pay services, Yahoo! reported its small-business community, HotJobs and classified-listings businesses saw $32.4 million in revenue in the third quarter for a 26% jump.

Yahoo! shares rosed to $39.31 in after-hours trading from $38.79 at yesterday's 4 p.m. Nasdaq close.

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