Yahoo shares jumped 9% despite a 20% fall in first-quarter earnings.
Yahoo’s profits of $312 million still beat expectations.
Yahoo also said revenue from display advertising increased by 2% to $409 million, the first rise in some time. Overall, first quarter revenue was $1.1 billion, the best since 2010.
“I am really pleased by our first-quarter performance,” said Yahoo CEO Marissa Mayer in a statement.
Yahoo also reported that it had 430 million monthly mobile users who accessed Yahoo products, a crucial measure as the firm seeks to catch up with Facebook and Google to attract mobile advertising.
It also increased its total workforce by 8% to 12,400 global employees.
In contrast to Yahoo’s earnings fall, Chinese internet giant Alibaba, of which Yahoo owns a 24% share, reported surging revenues.
These increased by 66% in 2013 Q4 to $3.06 billion, compared with $1.84 billion during the same period a year earlier.
Profits increased 110% to $1.4 billion, compared with $642 million a year earlier.
Alibaba’s fourth quarter earnings were released as part of Yahoo’s report.
Alibaba, China’s largest internet company, is expected to complete a public share sale sometime this summer on a US exchange.
The share float could raise as much as $15 billion, making it the biggest technology company debut since Facebook’s stock sale in 2012.
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