Yahoo posts 20 percent rise in advertising revenue

Slow revenue growth, but profit has more than doubled.

Yahoo has tipped up with its financial results, boasting that its online advertising business has grown by 20 percent.

Revenue in the second quarter was US$1.6 billion, a two percent increase against the same period in 2009. Income from operations more than doubled to US$175 million from US$76 million last year.

"We are pleased that we continued to deliver strong operating income and margin expansion," said Yahoo chief executive Carol Bartz. "Our search fundamentals are improving, and we posted another quarter of healthy display advertising growth."

The firm made some good gains over the past three months, including 19 percent growth in display advertising on its operated or owned sites.

Yahoo also bolstered its relations with Facebook by linking its Pulse app with the social networking site, and launched apps for the Android and iPhone operating systems.

The company increased its footprint on hardware with the extension of a deal with Samsung, a strategic alliance to put its services on Nokia handsets, and a deal with Sony that will see Yahoo appearing on televisions.

The results could have been boosted by Yahoo's advertising relationship with Microsoft, which the firm said had reduced its search operating costs to the tune of US$86 million. These reimbursements will continue until Yahoo has "fully transitioned to Microsoft's search platform", it added.

Yahoo is expecting revenues to continue to grow in the next quarter, rising to between US$1.57 billion and US$1.65 billion.