Search engine Yahoo! posted solid first quarter results yesterday in its much anticipated financial report, with profits from pay per click advertising and search at the top end of analyst’s expectations. Read More

Wall Street has been abuzz waiting for the results as the financial statement was seen as a key indicator in the next stage of Microsoft’s desired takeover. The software giant’s chief executive Steve Ballmer moved to quash speculation before the results had even been made public, commenting a few hours before the release that Microsoft would be unlikely to up their offer, whatever the figures.

For their part, Yahoo! declared themselves proud of the results and their first profit rise in two years ($542 million compared with $142 million this time last year), and a 3 cent earnings per share above predictions.

Focus remains on search and pay per click advertising, although Yahoo! has said it is still too early to speculate on the outcome of a trial with Google on web search advertising, started two months ago.

With pay per click advertising a strategic focus for the coming months and the company said to be in talks with AOL Time Warner about a possible merger, Yahoo! is an increasingly attractive option for PPC advertisers.

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