TOKYO - Yahoo Japan Corp., the largest online auction operator in the country, said Wednesday it posted record profits in the year ended to March driven by robust advertising as companies switched to the Internet to do business.
Yahoo Japan, which is also the nation's largest online advertising business, posted a net profit of 36.5 billion yen (341 million dollars), up 47.1 percent and in line with its own forecast while revenue rose 55.4 percent to a record 117.8 billion yen and above its estimate.
"Our online advertising business did better in the fourth quarter (to March) than we had earlier thought," Yahoo Japan president and chief executive officer Masahiro Inoue told a news conference.
Nationwide advertisers, such as cosmetics and beverage makers, are increasingly aware of the impact of the Internet, which has boosted advertising placements, he said.
Ad placements from such national clients, who used to prefer conventional media such as television, rose to 2.87 billion yen in the January-March quarter from 2.61 billion yen in the previous three months.
"We believe that the online advertising market, which stands at 180 billion yen a year, could expand to one trillion yen in the next few years," Inoue said.
The company is 41.9 percent owned by Softbank Corp. and 33.5 percent by Yahoo! Inc. of the United States.
For the first quarter to June, Yahoo Japan forecast net profit of 8.9-10 billion yen on revenue of 36.6-39.2 billion yen. It did not provide a forecast for the year to March 2006.
Fourth-quarter operating profit from its listing business, mainly advertising, jumped to 7.33 billion yen from 3.3 billion yen a year earlier and 5.8 billion yen in the third quarter to December.
On the other hand, operating profit at the auction business -- once its cash cow -- fell to 4.7 billion yen from 4.8 billion yen in the previous quarter.
"Although we suffered from the first-ever profit decline in the auction business, as we increased security costs, we believe the auction business still has strong growth potential," Inoue said.
Yahoo Japan has been sued by customers for scams on its site in the nation's first class-action suit seeking compensation from an online auction broker.
A total of 572 people across Japan paid for Yahoo auctioned items such as liquid-crystal televisions and digital cameras but did not receive the goods.
Before the results were announced, Yahoo Japan shares closed up 3,000 yen or 1.3 percent at 236,000 yen on the Tokyo Stock Exchange Wednesday, when the benchmark Nikkei-225 index gained 0.21 percent.
04/20/2005 09:21 GMT