Yahoo boost for tech investors

Yahoo: flying the flag for the dot.com sector

Investors in technology firms received a double boost, after both mobile phone giant Motorola and dot.com stalwart Yahoo posted results higher than Wall Street had expected.

While Motorola reported its second successive quarter in the red, the loss of $232m, equivalent to 11 cents a share, was less than analysts had feared.

Wall Street had expected Motorola to post a 12 cent a share loss, after the firm, the world's second-ranking mobile phone maker, warned in April of lower profits.

And Yahoo, reporting a small underlying profit for its second quarter despite a slump in advertising revenue, said it was in a position to consider takeovers.

"In order to strengthen and grow the business, we will pursue partnerships and joint ventures with major corporations, make acquisitions, and continue to innovate and develop new services," chief executive Terry Semel said.

The announcement came hours after internet networking firm Cisco Systems revealed it had bought networks technology company AuroraNetics for $150m.

And the results statements will come as a boost to tech investors digesting a series of warnings from technology firms, most recently computer giant Compaq, which on Tuesday highlighted declining European trade.

Ongoing struggle

Yahoo earned $8.7m over the three months, well down on the $69.2m profit a year before, but above the break-even result predicted by Wall Street.

The firm also revealed that its number of unique users rose to 200 million in June, compared with 156 million a year before.

But Mr Semel, the former Warner Bros boss appointed Yahoo chief executive in April, said the firm still faces a struggle to underpin its financial standing.

"There is no single event that will transform this company," Mr Semel said..

"Rather it will be a series of events starting this quarter that will demonstrate Yahoo's momentum and progress."

Wednesday's announcement, made after the close of US stock markets, revealed a slump in advertising revenues which took earnings to $182.2m over the three months, compared with $273m a year before.

Market reaction

Yahoo shares had earlier slid 4.5% to $17.03 in Wednesday trading, after online advertising broker DoubleClick warned that its revenues had slumped by nearly 30%, raising fears over earnings in the dot.com sector.

Motorola shares had closed 17 cents up at $15.67, ahead of the profits statement.

The stock climbed to $16.20 in after-hours trading.