Yahoo! Goes Bananas After Stock Split

Typical of the warm feelings toward Yahoo! on the Street is a report issued last week by American Technology Research's Mark Mahaney, who initiated Yahoo! with a buy rating and a $64 price target. Citing a bullish outlook for Internet advertising, among other factors, Mahaney called Yahoo! his top buy recommendation among large-cap Internet companies -- for investors with a 12-month time horizon. (Mahaney's firm has no banking relationship with Yahoo!.)

One of the key factors driving Yahoo! is the growth of Internet advertising, writes Mahaney. He forecasts overall growth in 2004 U.S. Internet advertising of 30%, up from 20% growth in 2002, though behind the fourth-quarter 2003 year-over-year growth rate of 38%.

For the latest quarter, the company's marketing services revenue, excluding traffic acquisition costs, amounted to $427.8 million, according to TheStreet.com's calculations. ATR's Mahaney, for one, had forecast marketing services revenue of $390.9 million.

The company's operating margins, excluding TAC, amounted to 24% for the latest quarter, up from 19.4% one year ago.