<p> The mixed progress report comes as expectations for the Web portal remain low two years into Chief Executive Carol Bartz' effort to revive growth at the company.</p>.<p> "Clearly there is some improvement in the business here, both from a topline perspective and a margin perspective," said Pacific Crest Securities analyst Steve Weinstein.</p>.<p> "The growth in their display business, when you peel everything back, continues to look good," he said.</p>.<p> But analysts said Yahoo's search business, which experienced a 19 percent year-on-year decline in net revenue in the first quarter, is a cause for concern.</p>.<p> Yahoo executives said on Tuesday that the company would delay plans to use Microsoft's search advertising system in certain markets as it waits for Microsoft to improve the technology.</p>.<p> In its current state, Yahoo executives said, the Microsoft search technology was not delivering the expected lift to Yahoo's search ad revenue.</p>.<p> Revenue per search won't rise to levels Yahoo experienced pre-Microsoft until the end of the year, compared with a previous forecast of mid-year, Bartz said on a conference call on Tuesday.</p>.<p> Bartz said she was confident that Microsoft had a clear plan to address the issues. And she noted that under the 10-year deal that Yahoo struck with Microsoft in 2009, Yahoo gets reimbursed by Microsoft through the end of next March for any decline in revenue per search.</p>.<p> Microsoft was not immediately available for comment.</p>.<p> Shares of Yahoo were up roughly 3.5 percent at $16.68 in after-hours trading on Tuesday.</p>.<p> Looking forward, Yahoo projected net revenue between $1.08 billion and $1.13 billion in the second quarter. Analysts were looking for $1.1 billion</p>.<p> Yahoo is one of the most popular destinations on the Web and the No. 1 provider of online display ads in the United States, but the company is facing increasing competition from social networking service Facebook and continuing pressure from search leader Google Inc.</p>.<p> Yahoo said it earned $223 million in net income, or 17 cents a share, in the three months ended March 31 compared with $310 million, or 22 cents a share, in the year-ago period.</p>.<p> Excluding charges related to investments in Japan, Yahoo earned 19 cents per share, comfortably topping the 16 cent average of analysts polled by Thomson Reuters I/B/E/S.</p>.<p>Yahoo executives said the company was continuing to make progress on efforts to expand into the fast-growing mobile Internet market, and to increase the amount of video advertising on the site.</p>.<p> Net revenue, which excludes fees paid to partner websites, was roughly $1.064 billion in the first quarter, squeaking past the $1.055 billion average of analyst expectations but falling 6 percent from $1.13 billion a year earlier.</p>.<p> "Our turnaround is proceeding on schedule, and we are very confident Yahoo is heading in the right direction," Bartz told analysts on the call.</p>
<p> The mixed progress report comes as expectations for the Web portal remain low two years into Chief Executive Carol Bartz' effort to revive growth at the company.</p>.<p> "Clearly there is some improvement in the business here, both from a topline perspective and a margin perspective," said Pacific Crest Securities analyst Steve Weinstein.</p>.<p> "The growth in their display business, when you peel everything back, continues to look good," he said.</p>.<p> But analysts said Yahoo's search business, which experienced a 19 percent year-on-year decline in net revenue in the first quarter, is a cause for concern.</p>.<p> Yahoo executives said on Tuesday that the company would delay plans to use Microsoft's search advertising system in certain markets as it waits for Microsoft to improve the technology.</p>.<p> In its current state, Yahoo executives said, the Microsoft search technology was not delivering the expected lift to Yahoo's search ad revenue.</p>.<p> Revenue per search won't rise to levels Yahoo experienced pre-Microsoft until the end of the year, compared with a previous forecast of mid-year, Bartz said on a conference call on Tuesday.</p>.<p> Bartz said she was confident that Microsoft had a clear plan to address the issues. And she noted that under the 10-year deal that Yahoo struck with Microsoft in 2009, Yahoo gets reimbursed by Microsoft through the end of next March for any decline in revenue per search.</p>.<p> Microsoft was not immediately available for comment.</p>.<p> Shares of Yahoo were up roughly 3.5 percent at $16.68 in after-hours trading on Tuesday.</p>.<p> Looking forward, Yahoo projected net revenue between $1.08 billion and $1.13 billion in the second quarter. Analysts were looking for $1.1 billion</p>.<p> Yahoo is one of the most popular destinations on the Web and the No. 1 provider of online display ads in the United States, but the company is facing increasing competition from social networking service Facebook and continuing pressure from search leader Google Inc.</p>.<p> Yahoo said it earned $223 million in net income, or 17 cents a share, in the three months ended March 31 compared with $310 million, or 22 cents a share, in the year-ago period.</p>.<p> Excluding charges related to investments in Japan, Yahoo earned 19 cents per share, comfortably topping the 16 cent average of analysts polled by Thomson Reuters I/B/E/S.</p>.<p>Yahoo executives said the company was continuing to make progress on efforts to expand into the fast-growing mobile Internet market, and to increase the amount of video advertising on the site.</p>.<p> Net revenue, which excludes fees paid to partner websites, was roughly $1.064 billion in the first quarter, squeaking past the $1.055 billion average of analyst expectations but falling 6 percent from $1.13 billion a year earlier.</p>.<p> "Our turnaround is proceeding on schedule, and we are very confident Yahoo is heading in the right direction," Bartz told analysts on the call.</p>