Oct. 21--Yahoo's stock jumped more than 5 percent in after-hours trading Tuesday as the Sunnyvale Internet giant reported a tripling in third-quarter profit amid signs its Internet advertising business seems to be stabilizing.

Analysts said cost-cutting and new initiatives were starting to turn Yahoo around after a couple of turbulent years.

"The giant ship is making a turn, and it's a turn for the better," Jefferies analyst Youssef Squali observed.

Profit, which surged 244 percent from $54 million, or 4 cents a share, in the third quarter of 2008 to $186 million, or 13 cents a share, was up 32 percent from the second quarter.

But the gains came on revenue that sagged significantly from last year. The Internet portal's revenues of $1.575 billion were down 12 percent from $1.786 billion last year, although they showed no decline from the second quarter, a sign its business may be stabilizing.

The company handily beat Wall Street analysts' profit forecast of 7 cents a share on $1.12 billion in revenue.

In a sign that there is some economic recovery afoot, both Internet giants of Silicon Valley -- Yahoo and Google -- have reported stronger-than-expected profit. Last week Google reported a 27 percent jump in net income. "Yahoo is the largest display company, and we are seeing similar trends" to Google's, said Sandeep Aggarwal, an analyst with Collins Stewart. "Advertisers are coming back, spending more money," showing

confidence in likely demand, he said.

Yahoo portrayed the results as the fruits of cost-cutting and refocusing of its business, as well as an uptick in advertising that is a sign of a slowly reviving economy.

"Things are starting to loosen up. The advertising dollars are starting to flow a little bit better," said Chief Financial Officer Tim Morse. Beyond that, Yahoo is determined to cut unnecessary spending, he said.

"There's a change occurring in Yahoo that will value good, old-fashioned, get your hands dirty ways to get costs down or make sure they don't go up as much," Morse said.

In trading after the release of the earnings report, Yahoo shares rose 5.1 percent to $18.04. During regular trading they closed at $17.17, down 5 cents.

"They've stopped the rot. They've got the thing back on an even keel and they have a platform for revenue growth next year," said Jeffrey Lindsay, an analyst with Sanford Bernstein in New York.