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Yahoo increases cash reduces profits

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Yahoo has been hit by a 20 percent slump in profits, even as it made more money than anyone expected. Profits still beat many analysts' expectations and the $1.1bn revenue for the period is the best first quarter numbers the company has reported since 2010. However it still was a 20 per cent reduction on last year.

Yahoo chief executive Marissa Mayer said she was really pleased by Yahoo’s first quarter performance. The first quarter was an early and important sign of growth in its core business. Mayer said that mobile was the key to Yahoo's future growth.

"We're delighted to now see more than 430 million monthly mobile users accessing Yahoo's new products," she added.

The web firm also reported a two percent increase in display advertising revenue and a seven percent rise in the number of adverts sold. Yahoo is making most of its money from its holdings in two Asian internet companies — China's Alibaba Group and Yahoo Japan.

The outfit has been struggling to sell more ads, even as marketers divert more of their budgets to the internet. Most of those digital dollars, though, have been flowing toward Google and Facebook. Yahoo's share of the worldwide market for digital advertising is expected to shrink to 2.5% this year, down from 3.4 per cent in 2012, while Google's share climbs to 33 per cent in and Facebook's share rises to 8 per cent in, according to the research firm eMarketer.

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