As forecast last week, Overture Services ( OVER) overwhelmed expectations.

For the fourth quarter ended Dec. 31, the pay-for-placement Internet search engine reported revenue of $101.2 million, up from $39.8 million a year earlier, and well ahead of the company's guidance of $76 million.

Net income for the quarter, according to generally accepted accounting principles, amounted to $20.8 million, or 35 cents per share, reversing a year-ago loss of $7.27 per share. The latest-quarter performance was more than double the expected net income of $10 million, or 17 cents per share.

As also foreshadowed last week, Overture -- formerly GoTo.com -- raised revenue guidance for 2002 to $442 million from $345 million, and raised full year earnings guidance to 93 cents from 45 cents.

Overture, which Tuesday morning announced an expanded deal to provide paid-search listings for Microsoft's ( MSFT) MSN, rose $5.91 in regular trading Tuesday, or 27%, to close at $27.66. Shares rose an additional 36 cents in after-hours trading.

Overture, the only major Internet advertising-based company enjoying such revenue growth from 2000, has seen its stock whipsawed lately by nervous investors worrying when the company might stumble like so many other high-growth Internet stocks before it.

Last Wednesday, the company's shares fell from $30.42 to $17.92 in a single day on the news that the company wasn't renewing an affiliation agreement with the Internet service provider EarthLink ( ELNK). That kneecapping prompted Overture to make last week's positive preannouncement; the company said that the loss of the EarthLink business wouldn't have a material effect on the company's results. The company's shares rebounded $4.73 last Thursday.

Addressing worries that the company may lose affiliation agreements or overpay for the privilege of appearing major Web sites, CEO Ted Meisel told analysts Tuesday, "We have confidence we are building a sustainable business with plenty of room for Overture and our affiliates to prosper."

Based on the new EPS forecast for 2002, Overture, which traditionally has enjoyed a rich price-earnings ratio, is trading at about 30 times 2002 earnings.