The focus is placed on the paid listings and contextual advertising segment that Yahoo! acquired when it bought Overture last year as the driver of its Q4 revenue and earnings growth. As Reuters reports, 4th quarter earnings came in at $75 million, versus $46.2 million for Q4 2002, a 62% increase. It is certainly true that the phenomenal growth spurt in the paid listings category that Overture essentially created in 1999, along with the more recent contextual ad category, contributed greatly to Yahoo!'s positive results. But, one shouldn't disregard the other areas in which Yahoo! operates in divining the long-term outlook for the company. Yahoo! is a major player in virtually every segment that is experiencing strong growth online: online shopping, for-fee content sales, personal dating services, job-listing services, digital photo sharing, fantasy sports, premium e-mail services, and personal finance. Not to mention search. The point is that Yahoo! is a very diversified company. As Terry Semel, Yahoo!'s CEO, said in the earnings conference call on January 14, "we are extremely well-positioned to benefit from some of the most exciting business opportunities of our time. These include the role that the Internet and broadband can play in changing the lives of consumers, as well as the opportunities Yahoo! can bring to small and large advertisers around the world."

It is quite a challenge for any company to operate effectively in so many diverse areas, but an impressive attribute of Yahoo! is its understanding of the importance of building relationships with customers and advertisers, especially in key vertical segments, a theme that Semel repeated throughout the earnings call. Yahoo! also has top executives from traditional publishing and entertainment who understand the content business and the importance of offering quality products and services in order to attract advertisers. And, with the Overture team, they acquired a strong advertising team. Nonetheless, the strategy of putting a stake in nearly every segment (mostly consumer-oriented) that looks promising may be yielding good results in the current rapid-growth stage, but it's a difficult strategy to pull-off in the longer-term when growth levels off and competition heats up on multiple fronts. But for the near future Yahoo! is well-positioned for growth.