Yahoo has posted quarterly results showing a rebound in brand advertising and beating Wall Street forecasts, and gave a more optimistic outlook that drove up its shares nearly 10 per cent last night.
Net profit for the third quarter was slightly lower than the same quarter a year earlier but revenue far exceeded Wall Street's muted expectations.
The results buy more time for Yahoo's recently elevated management team to demonstrate progress in the face of harsh criticism calling for it to slash poorly performing business or sell the company outright.
Shares of Yahoo closed down 4.2 per cent at $26.69 on Nasdaq. But they jumped 9.3 per cent following the report to trade at $29.18 in after-hours action.
Gross revenue rose 12 per cent to $1.77 billion. Excluding payments to advertising partners, revenue rose 14 per cent.
Sales on its own site grew 24 per cent, powering results, while efforts by the company to curtail low-quality ads among network affiliates hurt revenue growth on non-Yahoo properties.
Underscoring the challenges it faces is that revenue at crosstown rival Google is growing four to five times faster than Sunnyvale, California-based Yahoo's.
President Susan Decker said Yahoo has seen an acceleration of corporate display advertising to a nearly 20 per cent growth rate during the third quarter after nearly five quarters of decelerating growth. Yahoo is the largest display ad provider.
Chief Executive Jerry Yang said Yahoo's strategy over the next several years is to focus on being the starting point for the largest number of consumers in areas such as online finance, sports and news and the must-be location for advertisers and developers of the latest Web services.