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Yahoo, Ask, InfoSpace Profit from Search Advertising

With 3.3 billion searches conducted every month in the U.S., and a lucrative advertising market swelling, search is one of the most attractive businesses on the Net. A study by U.S. Bancorp Piper Jaffray expects the overall search market to increase from $2.3 billion in 2003 to $5.7 billion in 2008.

Following on the coattails of Yahoo, InfoSpace, LookSmart and other search engine/search advertising firms, Ask Jeeves reported excellent “more than expected” earnings for 2003. The Street reports:

Ask Jeeves rose 3% in early trading Thursday after the search engine company’s earnings beat expectations.

For the fourth quarter ended Dec. 31, the company reported revenue of $31.8 million, up 58% from the prior year’s figure and ahead of the Thomson First Call consensus of $31 million.

Pro forma income from continuing operations amounted to $8.2 million, or 14 cents per share, ahead of the First Call estimate of 11 cents. The year-ago figure was $4.5 million, or 10 cents per share.

Including items such as amortization of other assets, the GAAP income from continuing operations was $7.6 million, or 13 cents per share.

Ask Jeeves reportedly derives a majority of its revenue from search-related ads sold- in the same fashion as Google, Yahoo’s Overture and the others.

Infospace also surpassed expectations and its stock rose 28% on Wednesday! Additionally, shares in Yahoo have more than doubled over the past year, as investors have grown increasingly confident in the Internet survivor’s ability to generate cash from its vast reach, particularly from the booming business of online searching.

According to Yahoo Chairman Terry Semel “We see enormous growth possibilities on a worldwide basis in a very, very high-margin business that fully takes advantage of our huge audience.” Looks like times may be good for these search engines for a good while.

Category SEO
SEJ STAFF Loren Baker Founder at Foundation Digital

Loren Baker is the Founder of SEJ, an Advisor at Alpha Brand Media and runs Foundation Digital, a digital marketing ...

Yahoo, Ask, InfoSpace Profit from Search Advertising

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