Yahoo! Q1 profit surges on search deal, upturn in ad biz

The company had a net income of USD 118 million in the corresponding quarter of the previous year, Yahoo! said in a statement.Revenue was USD 1.59 billion for the first quarter of 2010, a 1 per cent increase from the same quarter last year, it said.

"We had a good quarter, delivering income from operations higher than our outlook," Yahoo! CEO Carol Bartz said."Thanks to our efforts, our search share has stabilised and we grew display advertising by 20 per cent year-on-year. More importantly, guaranteed display grew by 24 per cent as advertisers took advantage of the science, art and scale that only Yahoo! can offer," she added.

The company's first quarter profits reflect Yahoo!'s revenue-sharing search deal with Microsoft, which launched in February. As per the agreement, Yahoo's website uses Microsoft's Bing search engine and the two companies share the revenues.
Yahoo! gained USD 43 million from Microsoft as one-time "net transition cost reimbursement" for expenditure the company incurred in 2009 as well as in the first quarter of 2010. In addition, Yahoo! received USD 35 million from Microsoft for search operating costs during the quarter.

Revenues of USD 875 million from Yahoo!'s owned and operated sites were flat compared to the figure of USD 872 million for the same period of 2009. This was despite a 20 per cent increase in display advertising revenue.Further, Yahoo!'s revenues from affiliate sites rose 7 per cent in comparison to the previous year to USD 548 million in the January-March period of 2010.The Internet company expects revenue in the range of USD 1.6 billion to USD 1.68 billion in the second quarter of the year