The internet company reported a net profit for the quarter ending June 30 of $113m (£61m), compared with $51m for the same period last year. Revenues were up from $321m in 2003 to $832m for the quarter.
Despite the positive news, shares in the Nasdaq-listed company plunged by over 8% when the market opened this morning because of a weak sales outlook. The price fell by $2.82 to $29.78.
Yahoo! said that it was benefiting from diverse sources of revenue, although advertising was far and away the most successful source of income for the company. It brought in revenues of $691m, compared with $219m for the same period last year.
The rise came from organic growth in the search and marketplace properties, as well as from its acquisition of Overture in 2003.
Fees revenue, primarily from Yahoo! premium services, was up by 49% to $104m for the quarter, and listings revenue rose by 17% to $38m.
Terry Semel, chairman and chief executive officer of Yahoo!, said: "Yahoo! is in the midst of a product renaissance as we have been busier than ever rolling out new products and services we believe will be essential to our users."
As the paid-for search market, where advertisers can bid for search words to lead internet users to their sites, becomes more competitive, rival search engines Google and MSN are battling with Yahoo! to maintain loyalty and win new fans.
Currently, the battle has shifted to raising the stakes in free email, with Google launching Gmail with 1GB storage, and MSN Hotmail and Yahoo! Mail following suit to improve storage and services for free email account holders.
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