updated 4/7/2004 5:28:30 PM ET 2004-04-07T21:28:30

Yahoo! Inc.’s first-quarter profit more than doubled, propelled by advertisers eager to have their products promoted on the Internet’s most popular destination.

The Sunnyvale, Calif.-based company said Wednesday it earned $101 million, 14 cents per share, compared with $46.7 million, 8 cents per share, at the same time last year.

The results topped the mean estimate of 11 cents per share among analysts polled by Thomson First Call.

Revenue for the three months ended in March reached $758 million, up from $283 million last year.

Yahoo generated much of the revenue gain from its recent acquisition of Overture Services, which makes money distributing advertising links based on requests entered into online search engines.

Overture shares some of its revenue when the requests are made through search engines besides Yahoo’s. If that cost had been subtracted, Yahoo said this year’s first-quarter revenue would have been $550 million.

But by almost any measure, the first quarter accelerated the financial momentum that Yahoo has been building since late 2002.

“Yahoo’s performance surpassed even our high expectations,” crowed Yahoo Chairman Terry Semel, a former movie studio boss who lifted the company out of the dot-com doldrums.

The earnings spurt has turned Yahoo’s stock into a hot commodity, tripling the company’s market value since the end of 2002. Encouraged by its recent success, Yahoo announced a two-for-one stock split Wednesday, effective May 11.

The company released its report after the stock market closed Wednesday. Yahoo’s shares fell 42 cents to close at $48.35 on the Nasdaq Stock Market, then soared $4.18, or nearly 9 percent, in extended trading.

Yahoo has been on a roll for more than a year as the company has cashed in on the popularity of its Web site to attract more advertisers and introduce more fees for its services.

Those trends continued in the first quarter. The company’s marketing revenue totaled $635 million, more than tripling the $190 million collected at the same time last year.

First-quarter subscriptions totaled $88 million, a 39 percent improvement from $64 million last year. At the end of March, Yahoo had 5.8 million subscribers, doubling the total of 2.9 million in the prior year.

As people spend more time surfing the Web and less time watching TV, advertisers are expected to spend even more money on the Internet — a trend that bodes well for Yahoo.

“I think this roll is going to continue,” said Argus Research analyst Kevin Calabrese. “I don’t see anything disrupting it for at least another year.”

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