Yahoo doubles third quarter profit, but fails to impress

Yahoo has reported third-quarter profit of $396m, more than double the figure for the same period a year ago.

Yahoo has reported third-quarter profit of $396m (£234.5), more than double the figure for the same period a year ago.

But the results are regarded widely as lacklustre, extending a four-year slowdown that could increase pressure on chief executive Carol Bartz. Analysts said much of the quarter's profit came from Yahoo's sale of HotJobs.

Third quarter revenue was up just 2% from the previous year to $1.6bn, compared with Google's recently reported 23% increase.

Yahoo expects only $1.13bn to $1.23bn in revenue for the end of year holiday season, below the average analyst estimate of $1.26bn.

In an attempt to reverse its fortunes, Yahoo is focusing on e-mail, instant messaging, news content and social networking.

Bartz has said it will take several years to revive the company, but after nearly two years, Yahoo's business remains stagnant and its market share continues to shrink.

But Bartz has cut costs by outsourcing non-strategic services and handing over Yahoo's search engine and related advertising to Microsoft.

The Microsoft partnership has removed the cost of maintaining search infrastructure, enabling Yahoo to focus on display advertising.

On a conference call, Bartz refused to comment on a possible bid to take Yahoo private or combine it with AOL, according to the Financial Times.

"As tempting as it is to tell you what I really think, I can't talk about rumours," she said. "We like our strategy, we like our progress and that's what we are focused on."

Yahoo's shares were up just 1% in extended trading after the results announcement, reaching $15.65.

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