According to a recent report, there has been a 7.6% reduction in the profits of Yahoo! Inc. The reason behind it is the decrease in the income generated from online search ads.

Bloomberg had projected the sales to be $1.16 billion; however, the Company registered sales of only $1.13 billion.

Yahoo disclosed in a statement that there was an increase of 19% in the display advertising.

Research firm, EMarketer Inc., has predicted that there would be a rise of 16% in search based expenditure. The firm has stated that the online market would witness an overall increase of 11%.

But, Yahoo has not been able to bank on the online market due to its failed spin effort.

The Company declared its overall profit in this quarter to be $213 million.

UBS Analyst, Brian Pitz said that it will take some time to know that the decrease in advertising revenues is an indication of a larger problem or whether it is a localized phenomenon.

The income of the Company has witnessed a decrease in Europe, America, Africa and the Middle East, in comparison with the last quarter of 2009.

The Company should, therefore, devise new policies in order to derive more profits from its online search business.