Great Quarter for Yahoo!

So much for the soft pricing on online advertising that RBC Capital Markets analyst Jordan Rohan cited in his negative comments toward Yahoo (YHOO) and Google (GOOG). Yahoo’s quarter came in meaningfully ahead of expectations, with EPS at 13 cents and revenue at $821 million, versus analyst estimates of 11 cents and $797 million.

The stocks of the online search and advertising companies are reacting very positively in after-hours trading. YHOO is up more than $2, with GOOG up $12, and INSP rallying 3% after a 4% gain during the regular session. No doubt that the shorts will be forced to cover before the latter two companies report their Q1 numbers.

Both Google and InfoSpace appear to be cheaper than Yahoo, so I’d stick with those two names in this sector.

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