Yahoo! Slumps on Soft Top Line

Crunchy Slowdown

On Wednesday, Yahoo! cited a rise in organic marketing services revenue for the latest period's growth, along with incremental revenue from acquisitions. Those include the Overture buy that boosted Yahoo!'s fortunes in the rapidly expanding paid-search business.

The company says companywide net revenue grew 42% from the year-ago quarter on an organic basis. Marketing services revenue grew 45% organically in the quarter.

But it seems that the segment didn't grow as fast as bulls had expected. Net marketing services revenue rose 9.2% sequentially to $467.5 million, falling short of forecasts such as that of Youssef Squali of Jefferies. He had forecast that $488 million of an estimated $622 million in second-quarter revenue would come from marketing services.

Fee-based revenue -- such as that from Internet access services offered in tandem with SBC (SBC Quote) -- amounted to $103.9 million, beating Squali's estimate of $99 million. Meanwhile, Yahoo! pulled down $37.8 million in listings revenue, primarily from the HotJobs employment site, beating the analyst's forecast of $35 million.