Yahoo's net profit and revenue fell in the first quarter but came in slightly better than expected by Wall Street analysts.
Yahoo said last night that net profit fell 28% compared with a year ago to $223m while revenue declined 24% to $1.2 billion.
Net revenue, which excludes traffic acquisition costs, the portion of revenue Yahoo shares with its partners, fell 6% to $1.06 billion. Earnings per share were down to 17 cents from 22 cents a year ago.
Yahoo said the decline in net revenue was primarily due to the revenue share from its internet search agreement with Microsoft. Microsoft and Yahoo entered into a search and advertising partnership in 2009, under which the US software giant will eventually power searches at all Yahoo websites.
Yahoo said display advertising revenue increased 10% from a year earlier to $471m while search revenue fell 19% to $357m.
Yahoo said it expected net revenue for the second quarter of between $1.07 billion and $1.12 billion.
The quarterly results for the company, while down from a year earlier, were slightly better than expected by Wall Street analysts.
Yahoo chief executive Carol Bartz, in a conference call with financial analysts, said the search market 'is encountering some issues related to Microsoft Ad Center technology'. She said it was not producing the revenue per search that had been expected but there was a 'clear plan' to address the issue, and the problems should be worked out by the end of the year.
