Online ad boom boosts internet giant

A BOOM in online advertising has pushed quarterly turnover at internet giant Yahoo through the $1bn-mark (£543.4m) for the first time. Meanwhile, profits soared 149% to $187m for the three months to 31 December, excluding money made from the sale of Yahoo's stake in Google. Total sales were up 62% to $1.078bn.

Yahoo and rivals such as Google have been benefiting from growth in online advertising as blue-chip companies become increasingly keen to switch spending from other media to the web.

Earlier this month Carat, a media-buying specialist owned by London-based Aegis Group, predicted that global online advertising spending would leap by 22% this year compared to a 4.9% rise in total advertising outlays.

Yahoo put its leap in revenues down to delivering new 'innovative' products and services. Terry Semel, chairman and chief executive, said: 'Yahoo also benefited from the growing acceptance of online advertising with marketers who recognize its effectiveness and are therefore increasingly using this platform to reach their consumers.'

The fourth quarter saw financial services firms and large retailers, in particular, boost the amount they spent to receive traffic from keyword internet searches on Yahoo.

Yahoo shares rose 1.7% in after-market trading, with the company also upbeat on 2005. Income for the first-quarter - and for the year as a whole - will be at the high-end of analysts' estimates, it said.

Yahoo stock peaked at more than $200 at the height of the dotcom bubble in early 2000. It hit a low of less than $9 in 2002 but has since bounced back to $37.18.