The results beat analysts’ low expectations—and Yahoo (NSDQ: YHOO) CEO Carol Bartz put a positive spin on the numbers. “With revenue coming in above our guidance and flat sequentially, we had a solid third quarter that signals our major businesses have stabilized,” she said in a release.

The poor sales numbers were expected. Not only does the display ad market remain generally weak, but Yahoo has also cut the number of “low-quality” display ads it runs across its properties in order to improve the user experience. However, the poor performance of Yahoo’s search business stands in sharp contrast to Google’s strong performance last week.

—Search: The decline in Yahoo’s search advertising sales accelerated during the quarter. Search ad sales tumbled 19 percent, more than what analysts had expected. Last quarter, search advertising on Yahoo’s owned and operated sites had fallen 15 percent.

—Display: However, display ad sales showed signs of improvement. Display ad revenue fell 8 percent during the quarter, less than the 14 percent decline Yahoo posted last quarter. Some analysts had expected a 20 percent drop in display ad sales.

—Revenue from affiliate sites: Revenue from affiliate sites dropped 6 percent to $526 million.

Earnings release | Webcast (5 p.m. ET)