Internet firm Yahoo has posted 11 per cent rise in net income to USD 237 million for April-June, 2011, even though the sales of its display advertising business declined during the quarter.

The company had registered a net income of USD 213 million in the second quarter ended June 30, 2010, Yahoo said in a statement.

The internet firm’s net revenues fell by 5 per cent vis-a-vis the year-ago period to USD 1.08 billion in the quarter under review, dragged down by a drop in display advertising sales.

Yahoo, which had entered into a search tie-up with Microsoft as part of efforts to streamline its operations, said sharing 12 per cent of advertising revenue generated on Yahoo sites with the software giant under the partnership was the primary cause of the second quarter decline in revenue.

The company said excluding Microsoft revenue sharing and other items, net revenue would have grown by 1 per cent during the April-June period of 2011, compared to the year-ago quarter.

Display advertising revenues were USD 40 million below street expectations at USD 467 million, but climbed 5 per cent overall compared to the year-ago period.

“We experienced softness in display revenue in the second half of the quarter due to comprehensive changes we have made in our sales organisation to position ourselves for more rapid display growth in the future,” Yahoo CEO Carol Bartz said.

In addition, search revenue was down 15 per cent to USD 371 million in the second quarter of 2011, dragged down by Yahoo’s search agreement with Microsoft and problems with its adCenter technology.

Looking ahead, Yahoo expects net revenue of between USD 1.05 billion and USD 1.1 billion in the third quarter, while analysts have been looking at net revenue of USD 1.12 billion.