Yahoo profit drops as revenue increases

San Francisco - Yahoo profits dropped in the second quarter by 2.3 per cent as revenue rose 8 per cent to 1.7 billion dollars, the internet media company said Tuesday.

Faced with increasing challenges from search engine Google and popular websites like Facebook, the company's profits dropped from 164.3 million dollars to 160.6 million dollars.

The earnings were released at the end of a tumultuous quarter for Yahoo that saw chief executive Terry Semel replaced by founder Jerry Yang. Also in the second quarter, Yahoo's new Panama advertising system came on line, aimed at better competing with Google for effective search ads.

But the company kept losing its share of internet search queries to Google. According to Nielsen/NetRatings, Yahoo's share dropped to 21.5 per cent in May from 22.9 per cent a year earlier, while Google jumped to 56.3 per cent from 49.1 per cent.

dpa