Michael Jackson, iPod sales fuel earnings

Yahoo, Apple exceed quarterly expectations

Michael Jackson drove humongous traffic to Yahoo, and Apple said its own products are cannibalizing sales of many of its iPod models.

Those were a couple of the takeaways from separate quarterly earnings reports Tuesday in which Yahoo and Apple each reported numbers exceeding the expectations of Wall Street analysts.

Yahoo said net income rose 8% to $143 million, despite a 13% drop in revenue to $1.57 billion in the second quarter.

Apple said net income improved 13% to $1.23 billion, on revenue that climbed 12% to $8.34 billion in its fiscal third quarter.

Yahoo CEO Carol Bartz bemoaned a dropoff in ads from entertainment companies while also calling the category one of Yahoo's fastest-growing. Bartz called the Yahoo home page "an essential ad buy" for big summer movies.

She also said news that the King of Pop had been rushed to the hospital caused 800,000 Internet surfers to click a link to the story over a span of just 10 minutes. And when it was learned he died, Yahoo News set a record with 16 million unique visitors in a day. The Jackson memorial was a record-setting event for Yahoo, too, she said, with the video being streamed 5 million times.

Bartz boasted that Yahoo drove 9 million users to a New York Times article about housing.

"We work with publishers, not against them," she said.

The Yahoo chief also promised that there will be "less irritating" ads that "cheapen" the Yahoo brand in the future.

Yahoo reported its earnings the same day it launched its revamped homepage that makes it easier for users to customize certain features and to figure out what's popular to the rest of the online population.

Meantime, Apple said it shipped 10.2 million iPods, down 7% from the same frame a year ago.

"We expect our traditional MP3 players to decline over time as we cannibalize ourselves with the iPod Touch and the iPhone," CFO Peter Oppenheimer said.

Oppenheimer called the quarter's results the "highest non-holiday earnings in Apple's history."

CEO Steve Jobs, who recently returned to Apple after a medical leave, did not participate in an earnings conference call with press and analysts.