Yahoo reports better than expected third quarter revenue and profit

Yahoo! Inc reported higher than expected profit and sales in the quarter ended September as spending by advertisers showed signs of revival in the third quarter.

Yahoo, however, reported revenues of $1,575 million for the quarter ended 30 September 2009, a decrease of 12 per cent from the third quarter of 2008 and slightly above the second quarter of 2009.

Excluding traffic acquisition costs that Yahoo shares with partners, net revenue stood at $1.13 billion in the September 2009 quarter against net revenue of $1.14 billion in the June quarter and $1.33 billion in the year-earlier period.

Excluding the impact of currency rate fluctuations and divested business lines, revenues for the third quarter of 2009 would have declined 7 per cent compared to the third quarter of 2008.

Shares of Yahoo, the top US seller of online display ads, jumped 5 per cent after the results, which analysts said boded well for the fourth quarter, when ad spending should improve further.

Yahoo's net profit, in fact, more than tripled year-over-year. However, a major part of it came from the sale of its stake in Chinese Web site alibaba.com.

Yahoo has undergone significant restructuring since Carol Bartz took over as CEO in January. Yahoo also signed a 10-year Web search partnership with Microsoft Corp to challenge Google.

Yahoo expects the Microsoft deal to close in early 2010, allowing significant progress on integration in one or two major markets next year.