Yahoo reports soaring third-quarter profits

Yahoo has announced Q3 earnings of $186m on revenues of $1.58bn

Web giant Yahoo has posted its third-quarter financial results, showing a revenue decrease against the same time last year, but a huge 225 per cent growth in profits.

The firm announced revenues of $1.58bn (£953m), representing a decrease of 12 per cent against the third quarter of 2008, but claimed that this was in line with its previous expectations.

"With revenue coming in above our guidance and flat sequentially, we had a solid third quarter which signals that our major businesses have stabilised," said Yahoo chief executive Carol Bartz.

"With new products like Yahoo Homepage, our brand revitalisation campaign and expansion in the Middle East through Maktoob.com, our execution is improving and we are focused on what we do best: being the centre of people's online lives."

Yahoo is looking to streamline operations and focus on the key area of its business, contextual advertising, and perhaps fittingly revenues. The company suffered a 19 per cent decline in search advertising, and an eight per cent decline in display advertising, across the board.

Cost-cutting measures, including employee layoffs, and an 18 per cent drop in operating costs contributed to earnings of $186m (£112m), a 225 per cent gain when compared to the $54m (£32m) in the same period last year.

"In the third quarter we saw strength in key areas of our business," added Yahoo chief financial officer Tim Morse.

"Our efforts to reposition Yahoo are still in the early stages, but we are confident that our investments in the business will enable us to capitalise on growth opportunities as the economy recovers."