Yahoo! has reported tripled profits in its first quarter but still faces Microsoft’s hostile takeover.

As Yahoo! reports tripled profits for the first three months of 2008, Microsoft’s unsolicited offer of $44.6 billion (£22.3bn) remains unimproved.

The internet firm Yahoo! yesterday (22 April) reported an income of $542.2 million (£271.5m) compared with $142.4m in the same period a year earlier. 

“We believe we can significantly accelerate our revenue growth, return to our historically high margins, and double our operating cash flow by 2010. This quarter’s solid performance underscores the fact that we are executing on that plan,” said Jerry Yang, Co-Founder and Chief Executive Officer of Yahoo! Inc.

“Not only does Yahoo! have a unique franchise, it increasingly has industry-leading tools, technology, and, most importantly, people. It is the hard work, dedication and professionalism of our people that is our greatest asset – and this quarter’s performance demonstrates how well they can perform under unusually challenging circumstances.”

Yang said the firm remained open to forging a deal with Microsoft but it is also continuing to explore other options.

Microsoft has warned that if its deal is not accepted by 26 April, it will mount a hostile takeover at a lower price. Prior to the release of Yahoo!’s results, Chief Executive of Microsoft, Steve Ballmer, said the company will hold firm on its offer for Yahoo regardless of whether Yahoo!’s quarterly results impress or disappoint investors.

At this time, the Microsoft offer remains unimproved – and the industry faces an interesting few days as the deadline for Yahoo! to accept the deal draws ever closer.