Revenue increased 1% to $1.6bn (£1bn) during the first quarter ending 31 March, reflecting the best results since Carol Bartz joined as CEO two years ago.
Net profit rose to $310m (£200m) from $118m (£76m) in the same period a year ago.
Sales and marketing expenses fell to $313m (£202m) from $321m (£208m) during Q1 in 2009.
Bartz says display advertising grew 20% during the quarter.
In her efforts to turnaround the company, Bartz has focused on cutting costs, cementing the partnership with Microsoft partnership and building the Yahoo! brand.
Yahoo!’s results were boosted by the deal with Microsoft, which sees Yahoo! use Microsoft’s Bing search engine and share the revenue.
The deal was cleared by both the European Commission and US regulators.
Profits were also boosted by the sale of its Zimbra web application service.
Bartz says: “We had a good quarter, delivering income from operations higher than our outlook.”
Last year, Yahoo! launched a $100m global marketing campaign to support its new open platform web portal and brand strategy, using the strapline “It’s You”.
Yahoo! UK managing director Mark Rabe is to leave the UK business and return to the US at the end of this year.