There's no doubt Yahoo! (YHOO) is showing initiative. The question that remains, however, is when that initiative will show results.

Investors will get the next progress report after the market's close Wednesday, when the Internet bellwether and onetime highflier is set to release financial results for the third quarter ended Sept. 30.

But just in case they'd forgotten over the last few months how Yahoo! is trying to supplement its mainstay advertising revenue with new subscription and fee income, Yahoo! on Monday adhered to its newfound habit of announcing a new revenue-generating venture a day or two before its quarterly numbers release.

Money

This time around, Yahoo! on Monday rolled out a corporate version of its Yahoo! Messenger program, which enables Internet users to engage in real-time typewritten chat with other users, just like

AOL Time Warner's

(AOL)

rival AOL Instant Messenger program. The new Yahoo! Messenger Enterprise Edition, pricing of which wasn't disclosed this week, will start limited field testing by the end of the year, says Yahoo!, and will go on the market in the first quarter of 2003.

This particular initiative, thus, won't boost Yahoo!'s quarterly numbers until six months from now at the earliest. So for now, investors will be looking for early numbers, if any, from previously announced projects, such as the partnership with telco

SBC Communications

(SBC)

to offer high-speed Internet connections under the two companies' brands. That service officially launched in mid-September, with little more than two weeks left to go in the quarter.

For the record, Yahoo! said three months ago to expect revenue of between $225 million and $250 million for the Sept. 30 quarter. Roughly splitting the difference, analysts surveyed by Thomson Financial/First Call are forecasting $238.4 million in sales.

Earnings before interest, taxes, depreciation, amortization and stock compensation expense, says Yahoo!, will come in between $38 million and $48 million for the quarter. Analysts are predicting a 4-cents-a-share profit for the quarter, compared with a one-penny loss a year ago.

Down from January 2000's $200-plus heights, Yahoo!'s shares were up 20 cents Tuesday to trade at $9.28. The stock is down 57% from its 52-week high and is only 34 cents above its 52-week low.

Value

Among analysts, the issue is whether Yahoo!'s growth prospects in a post-dot-com universe justify a share price that's 44 times next year's consensus earnings per share.

WR Hambrecht analyst Derek Brown, for one, rates Yahoo! sell, citing concerns about possible weakness in the high-speed access business, Yahoo!'s HotJobs employment business and online advertising. "At current levels, Yahoo!'s valuation seems unjustifiably high and does not seem to accurately reflect the company's fundamentals or near-term prospects," writes Brown, whose firm hasn't done underwriting for Yahoo!.

But based on factors such as Yahoo!'s $1.5 billion in cash and its value relative to other media companies, SoundView Technology's Jordan Rohan says Yahoo!'s valuation is "reasonable." Rohan, whose firm hasn't done banking for Yahoo!, rates it outperform.