Yahoo! CEO Jerry Yang said the search firm's progress "was promising", despite posting a 19% loss in net profits for Q2 2008, reports the New York Times. Yang said he was happy with the results, while Yahoo! CFO Blake Jorgensen told Reuters: "We are pretty pleased relative to both the distractions and the economy".

Yahoo! recorded net income of USD131m (USD0.09 per share), down 18.6% on its USD161m of income (USD0.11 per share) recorded for the same quarter in 2007. The results came in below analyst predictions which had estimated earnings of USD0.11 per share.

The results did little to improve Yahoo!'s bargaining position with Microsoft, claims the New York Times. However, Yahoo!'s stock price reportedly rose 2.7% following the results.

"This company is doing just fine in a tough economy and a tough environment," Yang tells Associated Press. He also says Yahoo! is not altering its financial forecasts for the rest of 2008 despite economic pressure in the online ad market.

Earlier this week, Yahoo! and shareholder-agitator Carl Icahn agreed to end their battle for control of the company, with Icahn and two of his preferred candidates set to take seats on the Yahoo! board. Robert Kotick, who has served on the board for five years, will resign to make room for Icahn.