Yahoo! Rallies After Earnings

The top-line forecast, however, isn't quite so straightforward. Rather than provide revenue guidance for a combined Yahoo! and Overture, Yahoo! is forecasting "revenues excluding TAC," or traffic acquisition cost. That number is the combined revenue for the two companies, less the percentage of Overture revenue -- lately in the range of 64% -- that the search engine firm pays to Web properties, including Yahoo!, for the privilege of displaying its listings on their sites. Revenue excluding TAC for the year 2003 will be in the range of $1.42 billion to $1.46 billion, according to Yahoo! -- ahead of the current Yahoo!-only analyst consensus of $1.31 billion.

The company provided no guidance for 2004.

Relevant to such competitors as AOL Time Warner's (AOL) America Online and RealNetworks (RNWK), Semel told analysts Wednesday that Yahoo! was developing various packages of premium stand-alone content along the lines of "Bring Your Own Access" services -- a phrase used by AOL to describe content it sells to broadband subscribers who get Internet access from other sources. Parts of these forthcoming services, said Semel, could be seen in the content that its customers get in ISP packages Yahoo! offers in conjunction with SBC and BT (BTY).

Ahead of Wednesday's postclose press release, Yahoo! shares slipped 14 cents to $38.79. The stock gained 44 cents in after-hours trading following the earnings report.

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