Music and finance divisions help Yahoo! beat revenue targets

Yahoo!, the world's most-visited website, reported better-than-expected third-quarter revenues last night as new features such as financial advice columns and music videos attracted more advertisers.

Third-quarter net income was $253.8m (£144.9m), compared with $253.3m a year earlier. The figure was little changed because last year's numbers reflected a gain on Yahoo!'s sale of a stake it held in Google.

Excluding fees paid to distribution partners, revenues were $932m, beating analysts' expectations of $918m. The company said it had benefited from adding more features to its site to try to draw in customers in the battle with other internet giants such as Google and Microsoft.

Last month, Yahoo! said it had hired Kevin Sites, a veteran television correspondent, to produce a multimedia website that will report on wars around the world. Mr Sites will report to Lloyd Braun, the former chairman of ABC's entertainment group, who oversees Yahoo!'s media group in Santa Monica.

The California-based company has extended its offering in other ways, adding Yahoo! Finance and Yahoo! Music, which are both profit generators.

Yahoo!'s results pleasantly surprised some investors, who had expected the company to report a slow third quarter because the period is usually quiet in the advertising market.

However, analysts including Goldman Sachs' Anthony Noto recently upgraded their expectations, because Yahoo! has had a strong record in selling lucrative banner ads and lured users to subscriptions services.

Yahoo! ranks second to Google in internet search, but leads the company, as well as Microsoft's MSN and Time Warner's AOL, in terms of visitors each month.

Yahoo! garnered 442.2 million global visitors in August, up 18 per cent from a year earlier, according to ComScore Networks, which tracks web use. MSN had 425.5 million visitors, Google had 403.2 million and AOL attracted 163.7 million.