Yahoo has reported first quarter revenues of $1.6bn, a 1 per cent increase from the first quarter of 2009.
Income attributable to Yahoo more than doubled to $310.2m from $117.6m a year earlier.
Profits exceeded analysts' estimates, bolstered by an improving online advertising market and the sale of Yahoo's Zimbra email business.
Yahoo also received $78m in net reimbursements in the quarter in terms of its search and advertising sales agreement with Microsoft.
Income from operations was $188m compared with $101m in the same period the year before, an improvement of 87 per cent.
"We had a good quarter, delivering income from operations higher than our outlook," said Carol Bartz, chief executive officer at Yahoo.
"Our search share has stabilised, and we grew display advertising by 20 per cent year over year," she said.
"More importantly, guaranteed display grew by 24 per cent as advertisers took advantage of the science, art and scale that only Yahoo can offer."
Tim Morse, Yahoo's chief financial officer, said the growth in operating income and expanded margins demonstrated the success of the company's efficiency efforts as well as the first tangible benefits of its search agreement with Microsoft.
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