SAN FRANCISCO � Almost two years after took over as chief executive of Yahoo the turnaround of the country's biggest Web portal is still clearly a work in progress.
Yahoo's tepid financial results, announced Tuesday, show a company that is making only modest headway as it tries to regain some of its former growth as well as its glory. Its business was essentially flat in the third quarter.
"They're treading water right now," said Jordan Rohan, an analyst with Stifel, Nicolaus & Company.
Ms. Bartz acknowledged that much work was ahead for Yahoo, based in Sunnyvale, Calif. "First you walk, then you run, then you fly," Ms. Bartz said in a conference call with securities analysts.
Still, she pointed to areas showing signs of improvement or at least stability. Yahoo's display advertising business is doing relatively well. Revenue from display ads on the Web portal increased 17 percent. But declines elsewhere eroded those gains. Revenue from search advertising and fees both fell.
Yahoo's net income more than doubled, to $396 million, or 29 cents a share, from $186 million, or 13 cents a share, in the year-ago quarter. Much of the increase, 13 cents a share, was a result of a one-time gain from the sale of its HotJobs business.
Excluding the sale, Yahoo would have had a profit of 16 cents a share. Wall Street had expected 15 cents a share, according to a survey of analysts by
Revenue climbed 2 percent, to $1.6 billion. Excluding payments to advertising partners, revenue was $1.2 billion, slightly lower than the $1.3 billion that analysts had expected.
Yahoo is trying to emerge from financial stagnation resulting from years of slow decision-making and a failure to innovate. Ms. Bartz, who was hired to restore the company's growth, is under increasing pressure to show results. Her plan has been to focus on the company's considerable strengths as a Web portal. It has an enormous audience of 630 million unique monthly visitors, making it the most-visited Web site in the world. She is outsourcing services deemed less important. Yahoo has already handed its search engine off to a rival,
But some investors are growing impatient and have begun demanding that Yahoo's board replace Ms. Bartz. Meanwhile, firms are considering making a bid to buy Yahoo, and have spoken with and the about teaming up on a deal, according to people knowledgeable about the matter who were not authorized to speak publicly.
During a conference call with analysts, Ms. Bartz declined to comment about any buyout talks.
Instead, she talked about the transition of Yahoo's search engine to Microsoft, a process that is close to being finished in the United States. She also spoke of the progress Yahoo has made behind the scenes revamping the technology behind its Web portal. The overhaul is eliminating many of the roadblocks that made it nearly impossible to introduce new services quickly.
Ms. Bartz noted an improvement in profit margins, a result she attributed largely to her aggressive cost-cutting over the last year. Margins in the quarter doubled to 12 percent from the same quarter a year earlier. Mr. Rohan, the analyst, said that Yahoo investors were "desperately in need of something to cheer about."
Yahoo's shares rose 0.7 percent in after-hours trading, to $15.60.