authorized the repurchase of up to $3 billion of common stock over the next five years on Thursday. The company also revealed that it has been in the market for its own shares to the tune of $165 million over the last two and a half months.

The buyback can be carried out from time to time depending on market conditions, the company said. It will be funded through working capital and can be suspended at any time. Yahoo! had cash and equivalents of about $4.6 billion on Dec. 31, 2004.

Perhaps more interestingly to shareholders, Yahoo! said it repurchased $165 million of its own stock in the first quarter, a period during which its price fell from $38.18 on Jan. 3 to Wednesday's close of $30.87. Those prices represent Yahoo!'s closing high and low for the quarter. The stock hit a four-year peak of $39.79 on Dec. 3, 2004.

Yahoo! said it has now used up a $500 million buyback authorization dating to March 2001. The repurchases comprised 38 million shares for $325 million, including the first-quarter transactions, plus $175 million outstanding through derivative transactions.

At $30.87, Yahoo! trades at 59 times this year's Thomson First Call consensus earnings estimate and 45 times next year. While Yahoo! is under no obligation to consummate the buyback, the company said it believes such an action is a legitimate way to reward shareholders.

"This stock repurchase program demonstrates the confidence we have in our company and shows our commitment to deliver long-term shareholder value," Yahoo! said. "The cash productivity of our business model enables us to actively invest cash in areas that we believe will drive future value for shareholders, such as stock repurchases."

Yahoo! rose 92 cents, or 3%, to $31.79 on Instinet. Other Internet companies, including


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, also rose following the announcement.