Yahoo Inc. reported yesterday that its profit more than tripled in the third quarter as the Internet service recorded substantial increases in advertising and a giant gain from the sale of part of its stake in rival Google Inc.

Yahoo officials said the total market value of its Google stake is about $1 billion, and the company reported a $129 million profit from the sale of part of that stake in Google's public offering. Yahoo was an early investor in Google, which provided search services on Yahoo before Yahoo bought Overture Services Inc. and began competing directly with Google for computer users and advertisers.

In the third quarter ended Sept. 30, Yahoo reported net income of $253 million (17 cents per share) compared with net income of $65 million (5 cents) in the same period last year. Excluding the sale of the Google stake, Yahoo had net income in the quarter of $124 million (9 cents), in line with Wall Street estimates. Yahoo recorded quarterly revenue of $907 million compared with $357 million in the same period of 2003.

Yahoo chief executive Terry M. Semel said the overall growth in Internet advertising and users, coupled with Yahoo's focus on enabling users to personalize their online experience, were key factors in the growth in profit. During the quarter, Yahoo began more aggressively offering its millions of users a variety of services that let them tailor the information they want to receive.

"Today's world is moving from mass media to digital media, a world in which the consumer is the programmer," Semel said during a conference call with Wall Street analysts. "We know we must deliver what consumers want, how they want it, where they want it, and when they want it."

Most computer users access Yahoo for its e-mail and online search services for free, leaving the company to seek profit from ads. The surge in quarterly ad revenue came from two sources: an increase in ads placed directly on Yahoo and a surge in search ads that accompany the results Internet users see on their computer screens as they hunt for information through Yahoo.

The company also earned 43 percent more in fees from online fantasy sports games. Yahoo also posted an increase in the number of individuals paying to subscribe to an array of advanced e-mail and other services it offers. The company said it now has 7.6 million paying subscribers, up 1.2 million from the previous quarter.

Semel said the fragmentation of the advertising market offers opportunities for Internet advertising. When he spoke to a group of national advertisers recently, he said, the buzz in the crowd was about the erosion of the network television audience, traditionally the easiest way to reach a mass market.

"The Internet will clearly become a more vital part of their marketing solutions," Semel said. "We are seeing this evolution with our brand advertisers in many categories on Yahoo."

With Internet use accelerating, Yahoo also raised its projections for the fourth quarter, estimating it will record as much as $760 million in revenue and post operating income of as much as $315 million. Semel pointed out that the projections and results contrast dramatically with the losses the company was reporting only several years ago.

"We are excited about the prospects not only for the next months or next year but hopefully for a number of years," Semel said.

Yahoo stock, which trades for roughly 133 times its profit per share, was changing hands around $34.80 in after-hours trading last evening, up 78 cents for the day. The company announced its quarterly financial results after the stock market closed for trading.

For the first nine months of 2004, Yahoo reported revenue of $2.5 billion compared with $961.2 million, and net income of $467 million (32 cents) compared to $162.9 million (13 cents) in the same period of 2003.