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While the overall profits for Yahoo! (YHOO) for the third quarter dropped by 5 percent from last year, the company still was able to beat expectations for the quarter.

Net income for the quarter which ended in September, finished at $151.3 million, down from last years' $158.5 billion. Revenue for the quarter, on the other hand, increased to $1.77 billion, up from $1.58 billion year-over-year.

Another strong performance for the company was net sales, which increased to $1.28 billion, up from $1.12 billion over last year.

Yahoo CEO Jerry Yang said in a conference call with analysts, "While we still have a lot more to do, we have taken some important steps and made strong initial progress. We have defined a vision of where we want to go." Yang was referring to the culture of the company as well as the strategy in that statement.

Yang also talked about scaling back on or shutting down what he called one-off services in the coming months. That may point to the difference between increased revenues and dropping profits. Obviously something has caused the costs of doing business to rise.

Part of that may be related to some increased hiring, with another 1,200 being added to the Yahoo fold in the quarter.

Much of the focus for Yahoo will be on the existing online properties where visitors land, according to Yang. Services like news, finance, sports and email will be worked with to increase the value to users, while also sending them to other Yahoo! services as well.

Responding to the "search" question, Yang added that "Longer term, our ambition in search is to change the game, and doing so, gain user share." Company President Sue Decker also said the company wants to take users "beyond search, to complete tasks."

All that sounds good, but it doesn't really explain anything as far as search goes. Changing the game is a great idea for any business. Changing the search game is much easier said than done though, and Yahoo will have to do something extraordinary to make it happen.

As far as search, because analysts and investors refuse to stop putting it forward to Yahoo, it puts the company on a defensive mode. Instead of overly emphasizing it, they need to focus more on monetizing their huge number of visitors and increasing their display ad income especially.

The next post we'll talk about Yang's three key objectives for Yahoo over the next several years.