Global revenue climbed 1.7% to $1.6bn, but reduced product development and other costs resulted in a 107% increase in operating profits to $189.2m.
With another $186.3m coming the company's way from the sale of job website HotJobs to Monster, its net income rose 112% to $398.2m.
The revenue drop in Europe, Middle East and Africa was mirrored in the Americas, with a 2.7% decline to $1.15bn.
Asia Pacific was the growth driver with a 30% increase to $321.6m.
Carol Bartz, president and chief executive of Yahoo!, said: "We delivered a solid quarter, with good display advertising revenue growth, big gains in operating income, and margins that were double what they were last year."
The company delivered its results amid speculation that private equity companies have drawn up takeover plans, although Bartz refused to comment on such talk.