US internet company Yahoo has continued to buck the flat advertising market and sign up more paying subscribers.

The company turned in quarterly net profits of $46.2m, or 8 cents per share, compared with a loss of $8.7m in the same period last year.

Its performance was boosted by a growth in earnings from premium subscription services.

The figures were better than many predictions, but Yahoo's shares still dropped 6%, when the markets opened on Thursday, reflecting traders' high expectations.

High-speed internet

Yahoo has succesfully fought off continued weakness in the advertising market by moving towards paid listings.

This is where advertisers pay to have themselves mentioned in conjunction with certain search results. It has also brought in more interactive ad forms.

Yahoo's Fees and Listings revenue grew 120% to $89.4m in the quarter, om the back of its personal ads business and subscribers to its high-speed internet services.

The company said it expected to reach a turnover of $1.15bn to $1.22bn in 2003.

Paying subscribers

Yahoo last broke the billion-dollar revenue mark in 2000, at the height of the internet boom.

Since then the company suffered a savage downturn in the internet advertising market.

The company had forecast it would end 2002 with about 2 million paying subscribers to its various premium services like e-mail.

But last week Yahoo Chief Executive Terry Semel said the company had actually passed that mark in early December.

The company said its capital expenditure for 2003 would be between $70m and $90m.