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Profit inches up for Yahoo

Per-share earnings for the Internet heavyweight hold steady at 17 cents per share, beating analysts' expectations.

Internet bellwether Yahoo on Tuesday posted higher third-quarter profit and revenue from a year ago and beat analysts' expectations, saying the record results were due to solid growth across its business.

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Yahoo CEO Terry Semel discusses the 48 percent climb in profits and the deal in China.
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Yahoo CFO Sue Decker explains why the company is "in the cat bird's seat" compared to its competitors.
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For the period ended Sept. 30, the company posted net income of $253.8 million, or 17 cents a share, up from $253.3 million, or 17 cents, a year ago.

Excluding the net impact of $16 million, or 1 cent a share, related to the sales of investments, Yahoo posted net income of $238 million, or 16 cents a share. Profit was 15 cents a share excluding $27 million in investment gains.

Revenue was $1.33 billion, up 47 percent from $907 million for the same period a year ago. Excluding traffic acquisition costs, revenue was $932 million.

Analysts polled by Thomson Financial had expected Yahoo to post profit of 14 cents a share, on average, and revenue of $918 million for the third quarter excluding traffic acquisition costs.

Last quarter, the company had forecast that revenue, excluding traffic acquisition costs, would be $880 million to $930 million for the third quarter.

Yahoo was ranked as the top Internet portal, with nearly 66 percent active reach, in September, according to figures from Nielsen/NetRatings.

Yahoo forecast full-year revenue, excluding traffic acquisition costs, at $3.66 billion to $3.71 billion, up 42 percent from a year earlier, and fourth-quarter revenue between $1.03 billion and $1.08 billion. Analysts, on average, were expecting fourth-quarter revenue of $1.06 billion.

The company said it had 411 million unique users in the third quarter and 191 million active registered users. Its marketing services business was $1.2 billion in revenue, up 46 percent from a year ago.

"We had seasonally better performance, particularly in our overall marketing services," which encompasses search and brand advertising, Dan Rosensweig, chief operating officer, said in an interview.

Yahoo, which is the leading search engine in some Asian countries and has grown market share in some of the larger European markets, will continue to take on its chief rival Google with expanded search and additional services, executives said.

"In short, we believe Yahoo is sitting in the cat bird's seat relative to our competitors as we have both strong brand and strong search offerings," Chief Financial Officer Susan Decker said in a conference call with analysts. "We believe we are on track to gain market share of the global online ad business for the fourth consecutive year."

Shares of Yahoo were up 9 cents to $33.79 in after-hours trading after closing Tuesday at $33.70, down 46 cents.