Yahoo reported on Tuesday that earnings in the third quarter dipped despite a rise in revenues and a nearly completed corporate reorganization.
Yahoo's net income for the quarter was US$151 million, or US$0.11 per share, compared with US$159 million in the same period last year.
Wall Street analysts had expected Yahoo to post an income of US$0.12 per share.
Revenue rose to US$1.77 billion from US$1.58 billion in the same quarter last year.
Yahoo co-founder Jerry Yang (楊致遠), who took over as chief executive office earlier this year and embarked in July on a 100-day plan to reorganize the company into a more profitable enterprise, remained upbeat about the results.
"Over the past three months, we conducted a thorough review of our business and the marketplace," Yang said.
"We are executing against our transformation and are excited about playing a leadership role in the large and growing Internet market," he said.
Yang said Yahoo made "key strategic decisions" to invest in and increase the number of users, advertisers, and Web site publishers that use its services.
"Moving forward, we are focused on three big multi-year objectives," Yang said.
"To become the starting point for the most consumers on the Internet; to be the must buy for the most advertisers; and to deliver open, industry-leading platforms that attract the most developers," he said.
Yahoo's third-quarter results came as it faced tough questions from lawmakers in the US Congress.
The US House Committee on Foreign Affairs announced on Tuesday it wanted Yahoo executives to testify at a hearing on the California firm's role in a human-rights case in China that sent a journalist to jail for a decade.
Committee chairman Tom Lantos has asked Yang and Yahoo general counsel Michael Callahan to appear at a Nov. 6 hearing to discuss the company's disclosure of information to Chinese authorities about the case of Shi Tao (
"Our committee has established that Yahoo provided false information to Congress in early 2006," said Lantos, a Democrat from California.
"We want to clarify how that happened and to hold the company to account for its actions. And we want to examine what steps the company has taken since then to protect the privacy rights of its users in China," he said.
The committee says it has information indicating Yahoo knew more about the Chinese investigation than Callahan admitted during testimony before the committee last year.
"We have now learned there is much more to the story than Yahoo let on, and a Chinese government document that Yahoo had in their possession at the time of the hearing left little doubt of the government's intentions," Republican Representative Chris Smith said.
"US companies must hold the line and not work hand in glove with the secret police," Smith said.