Yahoo's profits rose by more than 50 per cent in the second quarter this year, but its net revenues have disappointed analysts, and the search company's share price fell by more than 4 per cent.
The internet company's net revenue, which excludes the revenue it shares with website partners, was $1.13bn, below analysts' expectations of about $1.16bn.
Yahoo said net income in the second quarter was $213.3m, or 15 cents a share, up from $141.4m in the same period last year.
The quarter had looked fairly strong for the company until June, when many major advertisers suddenly reduced their spending, said Tim Morse, Yahoo's chief financial officer.
Yahoo's second-quarter revenue growth was 2 per cent while rival Google last week said its revenue was up 24 per cent in the same period.