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Yahoo!'s stock sank 10 per cent after it posted Q2 numbers today. The company earned $1.3bn in the quarter ending in June, Q2 FY2005, a 51 per cent increase year-on-year.

After advertising affiliate fees (or "traffic acquisition costs") of $485m, and operating expenses of $505m are deducted, Yahoo! earned $261m from operations.

Yahoo! booked an operating profit of $368m.

Yes, the internet pioneer is something of an accounting pioneer too, using cut-up techniques apparently borrowed from Brion Gysin to obfuscate its numbers. Footnotes are jammed between terms as "gross profit" and "net revenue". The company also disclosed a whopping one-time windfall of $563m from the sale of an investment, but wouldn't tell us what it was.

We can't be the only people having trouble reading. Reuters first headline triumphed, "Yahoo profit up, online advertising grows", but within an hour a second update had been issued, and this time the headline read "Yahoo revenue disappoints, shares drop".

Page views on Yahoo! properties dipped 3 per cent from the pervious quarter. Yahoo! added 7 million unique users in Q2, two per cent up, from the previous quarter, and the company continues to grow at a pace. Yahoo! employed 8,780 staff at the end of June, adding a net 700 jobs.

Analysts expressed concern about a slow down in advertising growth, and the stock sank to $34.44 in after-hours trading. ®

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