Yahoo Headquarters In Sunnyvale, Calif.
Reuters

Despite recent struggles, Yahoo has posted a rise in profits of 28 percent for the first quarter of 2012, with the California firm generating profits of $286m (£180m) and revenue of $1.08bn.

The positive quarter marked the first year-on-year increase in revenue since 2008 and Wall Street responded positively, with after hours trading seeing Yahoo's shares rise by nearly three percent, up to $15.41 per share.

Yahoo reaches ten percent of the world's population, with 700 million users, but its webmail service has struggled in recent years to keep up with social networks Facebook and Twitter.

The quarter was Yahoo's most successful in three years, but new chief executive Scott Thompson - who took over the reigns in January - is not satisfied, saying that the company is not growing fast enough.

Despite surpassing analysts' expectations, Thompson said to investors: "I'm not satisfied by the pace of top line growth and I won't be satisfied until it is at least in line with the market.."

Thompson said in the sales call on Tuesday: "I'm convinced that we don't need to reinvent who we are, but I'm equally convinced we absolutely do need to reinvent the experiences our users have with the marquee properties that bring them to Yahoo every day."

Thompson added that he had kept the company's turnover forecast wide - at between $1.03bn and $1.14bn for the current quarter - because the business is still volatile.

The chief executive added that he was still looking to sell its 40 percent stake in Chinese web giant Alibaba and that Yahoo is in active talks about a "simplified transaction structure" to help monetise the multi-billion-dollar holding.

Thompson did not elaborate on the possible sale of Yahoo's stake in Alibaba, but did say that returning cash to shareholders would be at "the top of the list" of priorities.

Earlier this month Yahoo announced that it would be cutting 2,000 jobs - around 14 percent of its workforce - in a move that was described as Thompson as "an important next step toward a bold, new Yahoo! - smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require."

Once severance pay of between $125m and $145m has been handed out, Yahoo predicted its cost-cutting programme will save $375m a year.

In March Yahoo filed a lawsuit against Facebook, accusing the social network of infringing on ten of its patents.