Yahoo has posted an increase in profits and revenue during the second quarter of 2010.
Net income was up 51 per cent to $213 million for the quarter.
The firm's increase in revenues fell short of predictions, rising just 2 per cent to $1.60 billion.
Analysts had predicted revenue would reach $1.68 billion for the quarter. In spite of rising sales of display adverts on Yahoo-run webpages, a steep drop in the sale of sponsored search results limited growth.
Yahoo shares fell by 7 per cent in after-hours trading on publication of the figures.
In a conference call with a market analyst, the company's financial head, Tim Morse, said: “This is undoubtedly a work in progress, but we do have a terrific value proposition, we are on the right path, and we need to keep making progress.”
Yahoo claims that its pages get around 600 million visitors every month.
The company has decided to focus on its online advertising business and content development, and is freeing up resources for the task by outsourcing its search results to Microsoft's Bing.