Hey investors, Yahoo's still not growing revenue

Yet shares jump nearly 5% in Wednesday trading after Q3 earnings report

Yes, there were some things to like in Yahoo's third-quarter earnings report released after Tuesday's market close -- a doubling of operating margins, strong growth (17 percent) in display ad revenue, and higher net income.

But not enough to warrant an increase in Yahoo's (NASDAQ: YHOO) share price of nearly 5 percent above Tuesday's closing price of 15.49. Yahoo climbed as high as 16.25 before settling in around 16.05 in the early afternoon.

(Also see: Not so fast, Carol Bartz)

I hate to keep beating this into the ground, but Yahoo's revenue is flat, and has been flat (or down) for the better part of three years -- even though CEO Carol Bartz insisted in a conference call Tuesday that revenue growth was her top priority. I posted this Tuesday, but it bears reviewing. Here's Yahoo's revenue (in billions of dollars) for each of the past seven quarters:

Q3 2010 -- $1.601

Q2 2010 -- $1.601

Q1 2010 -- $1.596

Q4 2009 -- $1.731

Q3 2009 -- $1.575

Q2 2009 -- $1.572

Q1 2009 -- $1.580

Again this is during a period in which search leader Google was posting quarterly revenue gains in excess of 20 percent. Which company do you think has a brighter future, and which one do you want to own shares in?

Of course, Yahoo shares might be benefiting Wednesday from an overall market rally in response to Tuesday's dismal day of trading. And the bump also could be from renewed talk of a buyout involving AOL and some private equity firms. One analyst quoted in a MarketWatch article said Yahoo's Q3 numbers increase the odds of a private-equity-involved buyout.

I'd have to agree. Yahoo is playing with a weakening hand, and there's no sign things are going to improve soon.

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