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Wednesday, 12 July, 2000, 21:20 GMT 22:20 UK
Yahoo fires Nasdaq rally
Yahoo is doing a lot better than most internet companies
Investors shout Yahoo as the company's earnings jump
The US technology index, the Nasdaq, has rallied as strong earnings from internet portal and access provider Yahoo restored investors' faith in internet stocks.

The index closed 143 points higher at 4,099 points, its highest close since 10 April.

Yahoo's positive numbers came as a welcome relief to investors, who have been fleeing dot.com companies amid jitters about their long-term viability. Yahoo's shares closed $19 higher at $125.

The positive sentiment in technology stocks fed through to blue chip stocks, with the Dow Jones Industrial Average also buoyed by the takeover of brokerage PaineWebber by Swiss bank UBS.

The Dow closed 56 points higher at 10,783 points.

Other technology stocks, including internet service provider America Online and internet venture capital firm CMGI, soared.

Surprise results

Late on Tuesday, Yahoo surprised the market with its strong second-quarter earnings

Net earnings were $73.9m, up 274% on the same period last year when the firm recorded just $27m.

Wall Street analysts had expected earnings per share of 10 cents, and the "whisper" figure - making the rounds just before results were released - had pushed expectations to 11 cents.

But Yahoo trumped this with earnings of 12 cents per share in the April-to-June period.

Sales during the quarter rose 110% to $270.12m.

Yahoo's page views rose to an average 680m per day in June, up from 625m in March, while Yahoo's various web sites recorded 156m unique users worldwide, including 20m in Japan.

Advertising concerns

"Yahoo saved the day," Barry Hyman, market strategist for Ehrenkrantz, King Nussbaum, said. "It showed that advertising dollars on the internet are strong, even given the problems that are out there."

Although the growth was impressive, analysts said concerns about the company's ability to pull in a constant flow of advertising remain.

The rash of dot.com failures has caused large internet companies like NBC Internet to lose important advertisers, but Yahoo said it was unlikely to be threatened by the fall-out.

It said less than 10% of its advertisers were "financially questionable."

Yahoo also noted that it has a growing number of advertisers from outside the US, which are not new or financially-stretched internet companies.

These old economy advertisers include Merrill Lynch, Johnson & Johnson, Air France and the US government.

Company chairman Time Koogle said the shake-out in the internet sector might even benefit companies like Yahoo because advertisers would focus on the more popular sites.

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See also:

11 Jul 00 | Business
Yahoo! delivers growth and earnings
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Yahoo grows on
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