While the display ad business performed as expected in the Asia Pacific and EMEA (Europe, Middle East and Asia) regions, it faltered in the Americas, particularly in the U.S., Yahoo CEO Carol Bartz said during a webcast to discuss the results.

"I'm not happy about our U.S. display performance," Bartz said.

The problem stemmed primarily from a major reorganization of the U.S. display-ad sales team in May, which caused a higher-than-expected turnover in staff, hurting sales in the latter half of the quarter, she said.

Yahoo expects the reorganization to boost display ad sales in the fourth quarter and next year, but the struggles will continue this quarter as new hires ramp up on their jobs, Bartz said.

Yahoo did grow its net income, however, by 11 percent to $237 million, and its earnings by 18 percent to $0.18 per share, matching the analysts' consensus estimate.