Investors rallied around Yahoo! (Nasdaq:YHOO) in early trading Wednesday, sending the stock to US$23.81, up 38 cents, after U.S. Bancorp Piper Jaffray slashed its first-quarter earnings and revenue estimates for the Web portal.
The investment firm cited persisting sluggish demand and longer sales cyclesfor the earnings reduction.
Over the past few months, Yahoo! has been moving to diversify its revenuestreams and decrease its dependence on online advertising. The Web giant’sefforts to boost income include a recent decision to charge users listingfees for online auctions, the move to sell placement in its directory, andan expansion in Australian markets.
In recent weeks, the Santa Clara, California-based company has been doggedin the press over a decline in the number of its auction listings after thecompany began charging fees.
However, Yahoo has said that the number of items being sold per listedauction had grown 550 percent, while the number of bids made on each item onthe site had increased fourfold.
In January, Yahoo! reported fourth-quarter results that were in line withexpectations, with pro forma income for the fourth quarter totaling $80.24million, or 13 cents per share, up from $55.7 million, or 9 cents, in theyear-earlier period. Revenue rose 53 percent to $310.9 million.
However, the company, which gets approximately 90 percent of its revenue from the sale ofadvertising space on its Web site, has suffered as many companies cut backon spending for online ads.
Yahoo! shares, meanwhile, have plunged morethan 85 percent over the past year.