Yahoo! profits drop by 19% despite revenues rise

23 Jul 2008

Yahoo! has reported a 19% drop in second-quarter post-tax profits to $131m (£66m), although revenues at the search giant grew by 6% to $1.8bn.

While the results came in below analysts forecasts, Yahoo! reassured investors that its outlook for the rest of the year was unchanged.

Blake Jorgenson, Yahoo! chief financial officer, said: "We are not going to change our business outlook that we provided at the start of the year and reiterated last quarter."

He went on to say that Yahoo!'s search and direct response display businesses were holding up amid tough economic conditions, though brand-focused display was weakening.

US revenues were up 13% to $1.26bn but international revenues were down 8% to $534,000.

The company's profits have been reduced by costs of $22m for bringing in advisers to help it deal with Microsoft's approaches to acquire all or part of the company and with talks with other interested parties, as well as costs relating to its proxy contest with Carl Icahn and litigation defence costs.

Its share price rose after the results were published in after-hours trading on the Nasdaq stock market, up 2.8% to $21.99.

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