Tech troubles: Yahoo bucks the trend

Ecommerce specialist Intershop experienced a nasty patch of stock market turbulence - its shares dropped 70 per cent in one day this week.

The dot-coms are (predictably enough) still under the cosh as well. Letsbuyit.com has taken over from Lastminute.com as pariah of the month, having suffered a catastrophic Christmas period during which its shares plunged 70 per cent and were temporarily suspended.

But amidst the tales of woe, one company - indeed one of the grand-daddies of the dot-com boom - has been sailing serenely on: Yahoo.

While the headlines focused on Yahoo's decision to alter its stance over Nazi memorabilia and other 'hate-related' material, the news that it is now charging people to put items up for sale was kept relatively low-key.

But it is important - as is the fact that Yahoo runs auctions in the first place. Yahoo started life as a pure-play search engine company, able only to generate revenues from advertising. Now it is also an auction site. It is now making money from that service. It even has a shop (of the real world variety) not far from silicon.com's offices.

In its last financial quarter, its revenues grew by 89 per cent, from $155m to $296m, and operating profits more than trebled, from $20m to $67m. Not bad for one of the lamented dot-com community.

In yesterday's leader about Letsbuyit.com, we wrote: "Last year saw analysts put crashing dot-coms down to ill-thought out initial concepts or poor first implementation. This year could see the lingering malaise of companies who have the first two right but fail to expand and grow the business consistently."

Yahoo proves that point admirably, because it is showing every sign of being able to grow its business.

And in this week's Model Management column (provided exclusively for silicon.com by FTDynamo), the point was made that "beyond the hype - and counter-hype - of recent months something significant is occurring. Interconnectivity, once we get to grips with it, has the potential to create huge productivity gains. The plain fact is that today more than 300 million people as far afield as Bangalore, Beijing and Palo Alto start their day by logging on, collecting their email, and surfing the web. They are being joined each day by tens of thousands more. We may indeed see a new economy, but we are only at its threshold."

There will be winners and losers in this new economy. But the opportunity remains - and Yahoo is one dot-com that seems to be heading in the right direction.