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17 Oct 06 22:20 23:20 UK |
Yahoo bosses have said they are dissatisfied with its performance after seeing quarterly profits fall 38% to $158m (£84.4m).
The internet search and media firm has been under growing pressure as analysts worry about technical difficulties and the challenge posed by rival Google.
They feel Yahoo is not meeting its advertisers' needs as effectively as rivals and product development is lax.
But sales still rose 19% to $1.58bn in the three months to September.
Strategic questions
The third-quarter results were in line with market expectations and the firm's shares dipped only marginally in trading.
"While we are tremendously excited about many things happening at Yahoo, we are not satisfied with our third quarter financial performance," chairman Terry Semel said.
Discounting ad commissions, sales for the period actually slid to $1.1bn.
Yahoo warned the market last month that its profits would be lower than expected, citing weakness in the car advertising market.
This warning raised concerns that the seeming slowdown in the US economy may disproportionately affect online media businesses.
Analysts have been questioning Yahoo's long-term strategy, fearing that it is less nimble on its feet than some of its rivals.
Google's $1.6bn acquisition of YouTube has compounded the pressure on Yahoo, despite the latter remaining the market's most visited website.
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