Yahoo's profits fell in the third quarter, and the company said growth would remain slow both for both display and search advertising.

CEO Terry Semel is quoted by the New York Times as saying in a conference call with investors: "I am not satisfied with our current financial performance and we intend to improve it. We are not exploiting our considerable strengths as well as we should be and we are committed to doing better." He cited increased competition for lower-priced advertising, pull-backs from major advertisers in several industries.

Yahoo's third-quarter profit fell 37 percent, despite higher ad sales and because of stock options costs and higher expenses, writes MarketWatch. Yahoo's Board also authorized a repurchase of up to $3 billion worth of its common stock over the next five years. Net income for the third quarter fell to $158.5 million, or 11 cents a share, from $253.8 million, or 17 cents, a year ago (when like most tech firms Yahoo didn't include option costs on its income statement).

Those results matched the average estimate of analysts. Net sales rose 20 percent, to $1.12 billion, in line with its reduced forecast. U.S. sales rose 14 percent; international revenue was up 29 percent.

For the fourth quarter, Semel said display ad sales are expected to increase only as fast as the overall online market. In search advertising, he predicted only 5 percent revenue growth. Semel said Yahoo would focus on three areas: narrowing the search-revenue gap between Yahoo and Google; extending its lead in display ads; and expanding into new areas, such as social networking and video.