Yahoo Sees Subscriber, Sales Growth

Yahoo Inc. predicted Wednesday that it would add at least 1 million subscribers annually for the next three years as the Internet icon continues its comeback from the dot-com crash.

During a daylong investment conference for stock analysts at its Sunnyvale, Calif., headquarters, Yahoo executives said they were making strides toward their goal of generating $2 billion in annual revenue by 2006.

Reaching that will depend largely on Yahoo’s ability to continue to persuade Web surfers to pay for the new services the company has developed in an effort to become less dependent on online advertising.

Yahoo ended 2002 with 2.2 million subscribers, up from 375,000 at the end of 2001. Company officials said Wednesday that the number of subscribers might double this year, raising a previous estimate of 50% growth made last month.

Yahoo also disclosed that a partnership with SBC Communications Inc. to provide Internet access accounted for about half, or 1.1 million, of its subscribers at the end of 2002.

The rest of Yahoo’s subscribers pay for a hodgepodge of other services, including deluxe e-mail packages and matchmaking.

Yahoo also provided a preview of a subscription service that will provide online video of sports and behind-the-scenes footage from popular TV shows. The company plans to introduce Yahoo Platinum before July.

If Yahoo hits its targets, the company should generate about $1 billion in cash in the next three years, said Chief Financial Officer Susan Decker.

Yahoo already has about $1.5 billion in the bank, prompting one analyst to ask whether the company would consider following in Microsoft Corp.’s footsteps by paying a stock dividend.

“We are certainly looking at that. We wouldn’t rule it out,” Decker said. Yahoo shares fell 12 cents to $18.17 on Nasdaq. The stock has gained about 11% since the start of the year.