One Net Stock That Isn't Poised to GoTo Zero

Advertising weakness? We scoff at your advertising weakness.

In a quarter when companies online and off are reporting ad revenues that are flat at best, pay-per-click search firm GoTo.com (GOTO Quote) reported a 20% sequential revenue jump for its second quarter. It also posted a bottom line that was better than analysts' expectations and raised revenue estimates, targeting sales of $320 million in 2002, up from the Street's expectation of $250 million.

GoTo's numbers, released Wednesday evening, indicate that at least one company has cracked the code of how to make money with Internet advertising. In GoTo's case, that means operating a search engine in which advertisers compete for top placement by deciding for themselves how much they'll pay to be listed in the search results. Advertisers, who pay only when a user clicks on their listing to visit their site, are listed in the search results in order of how much they've agreed to pay per click, with the highest bidders appearing at the top.

With analysts piling on to praise the company on Thursday, GoTo's shares jumped $2.36 to $23.51 in afternoon trading.

Going Higher

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