Yahoo profit falls, but revenue surges

SAN FRANCISCO: Internet giant Yahoo has said, its first-quarter profits fell 22 per cent on higher operating expenses and employee stock-option costs, even while sales surged on growth in online advertising.

Sunnyvale, California-based Yahoo said net income for the three months ended March 31 fell to $ 159.9 million, or 11 cents a share, from $ 204.6 million in the year-ago.

This year’s results included stock-option expenses of $ 71 million, up from six million dollars a year ago. Excluding options expenses, the profit amounted to 15 cents a share.

Sales rose 34 per cent to $ 1.57 billion from $ 1.17 billion. Excluding the costs Yahoo pays to its online distribution partners, sales rose 33 per cent to $ 1.088 billion, in line with analyst expectations.

Yahoo, the chief rival to Google in the market for Internet search advertising, saw revenue in its branded and search advertising businesses rise 35 per cent to $ 1.38 billion, as more consumers and businesses pay to have their ads displayed next to search results.

Sales in Yahoo's fee-based services business rose 25 per cent to $ 186 million, that revenue consists mainly of payments from Internet service providers such as AT and T and Verizon Communications, which partner with Yahoo to sell high-speed DSL services to consumers.

The company issued a second-quarter sales forecast that was in line with expectations.