[PR] Yahoo! Reports First Quarter 2004 Financial Results

"Revenues were $758 million in the first quarter of 2004, compared to $283 million in the same period of 2003. [...] Marketing services revenue for the first quarter of 2004 totaled $635 million, a 235 percent increase from the $190 million reported in the same period in 2003. Fees revenue for the first quarter of 2004 totaled $88 million, a 39 percent increase compared to the $64 million reported in the same period in 2003. This increase was primarily driven by the growth in the number of paying relationships for Yahoo!'s premium services, which were approximately 5.8 million at March 31, 2004 compared to approximately 2.9 million at March 31, 2003."

It's interesting to note advertising grew much more than fee-based services during the last quarter and trailing 12 months. Part of this is due to acquisitions (Overture above all), but even Yahoo's organic growth is stronger in marketing services (48%) than premium services (39%), even though the former started from a bigger absolute number. In Q1 '03 fees represented 22.5% of revenue, while this quarter this ratio dropped to 11.6%. Since most of the fee-related revenue comes from deals with broadband ISPs such as SBC, one can conclude that organic paid services are increasingly marginal at Yahoo.