Yahoo has reported net income for the first three months of the year fell of $160m (£90m). This represents a considerable fall from the previous year, where the net income was $204.6m, but the figures have been blurred by new US accounting rules.
Yahoo states that new accounting legislation for deducting the expenses for employee stock options has cost the firm $65m more than last year.
Without the changes in accounting practice, Yahoo claims an 18% rise in first quarter earnings, despite losing market share to its bitter rival Google.
The results, released after the close of trade in the US on Tuesday, were in line with expectations but shares rose by 33 cents to close at $31.30 on the Nasdaq.
Yahoo remains confident and claims that the fast growing online advertising market offers the internet giant very exciting prospects.