Yahoo's revenue rises 1 percent

SAN FRANCISCO (Reuters) - Yahoo Inc reported a modest increase in revenue during the third quarter, exceeding lackluster Wall Street targets, as the Internet company's online display advertising business continued to struggle.

Shares of Yahoo rose 3 percent to $41.40 in extended trading on Tuesday.

For the first time Yahoo disclosed its mobile revenue, which it said was more than $200 million in the third quarter. Yahoo said it expects that gross mobile revenues for the full year will exceed $1.2 billion.

Yahoo's revenue, excluding fees shared with partner websites, was $1.094 billion in the three months ended Sept. 30, a 1 percent increase from $1.081 billion in the year ago period.

Analysts polled by Thomson Reuters I/B/E/S were looking for adjusted revenue of $1.045 billion.

Yahoo's revenue growth has stalled in recent years as its once-hot Web portal and email service have lagged rivals such as Google Inc and Facebook Inc.

Yahoo said that it's display advertising revenue, which accounts for roughly 40 percent of Yahoo's total revenue, declined 5 percent in the third quarter. Revenue from Yahoo's search business rose 4 percent year-on-year to $452 million.

(Reporting by Alexei Oreskovic; Editing by Chris Reese, Bernard Orr)

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