Update: Yahoo! Beats Estimates as Page Views Increase

Updated from 4:57 p.m. EDT

Internet portal Yahoo! (YHOO Quote) reported second-quarter earnings Tuesday that beat Wall Street estimates, helped by a sharp increase in advertising revenue as Web-page views rose 8.8%.

Yahoo! said second-quarter net earnings, excluding charges, rose to 12 cents a diluted share from 5 cents a share in second quarter of 1999. The consensus of analysts polled by First Call/Thomson Financial had forecast 10 cents a share in earnings. The results excluded certain acquisition-related charges and taxes related to some exercised stock options.

Yahoo!, which makes most of its money from running advertisements on its Internet site and is seen as a barometer of the Internet economy, reported that revenue for the quarter rose to $270.1 million from $128.5 million in the same quarter last year.

The stronger-than-expected earnings could ease recent fears that popular Internet sites might be facing a decline in advertising revenues as many struggling Internet advertisers cut back.

The news sent shares of Santa Clara, Calif.-based Yahoo! higher. Yahoo recently traded up 6 1/2, or 6.1%, at 112 3/4 in after-hours trading. The stock had ended the regular session at 106 1/4.

"This quarter's financial results underscore the strength of our global franchise business," said Tim Koogle, chairman and chief executive officer at Yahoo!.

Koogle said the company also made progress in building each of its five business areas, including wireless services, media and voice services, consumer financial transactions, business services and building its global presence.

The rise in advertising revenue was helped by a jump in Yahoo! users. Page views -- a measure of traffic on the site's Internet pages -- rose 8.8% to an average of 680 million views per day in June, compared to 625 million per day in March. Fast growth in Japan accounted for much of the jump, as average daily page views there rose to 85 million in June from 65 million in March.

The increasing page views, along with the rise in advertising sales, could help to allay recent fears that Internet advertising revenue will start shrinking as many Internet companies run out of capital. Yahoo! stock has fallen in recent weeks, as several analysts downgraded their outlooks for the company's ability to generate advertising sales.

Fears of softness in Internet advertising have hit several other companies recently, such as advertising firm DoubleClick(DCLK Quote), which saw its shares fall 3 3/16, or 10.6% to 28 1/2 Tuesday after one of its large clients, iWon.com, decided to move to in-house advertising to save money.