Yahoo Second Quarter Net Income Drops 18 Percent

July 23, 2008 10:01 a.m. EST

Sunnyvale, CA (AHN) - Yahoo reported second-quarter net income fell 18 percent to $131.2 million, compared to $160.6 million during the same period in 2007. However, sales rose 5.9 percent to $1.8 billion, higher than the $1.78 billion expected.

Yahoo, which earlier this week settled a long-running dispute with billionaire activist investor Carl Icahn, also announced the economic downturn appears to have not affected advertising. The company said display advertising rose 12 percent for the quarter.

Despite the good news, Yahoo's net income came in below the $138 million experts had projected.

Although Yahoo Monday settled with Icahn, warding off a potential proxy fight at the upcoming Aug. 1 annual company meeting, the months-long struggle with Microsoft came at a price. Yahoo said it spent $22 million for advice on how to proceed with bids to acquire the company.