Yahoo! profit off 5% in quarter as woes continue

Ailing Internet giant Yahoo! said Tuesday that revenues and profits dropped in the fourth quarter, capping off its third straight year of declining results. The earnings did not surprise, after boardroom battles and the departure of another chief executive hobbled efforts to turn the still-popular Internet anchor around. Fourth-quarter net earnings declined 5.3 percent from a year earlier, as revenues dropped 13 percent. Earnings from core operations increased a solid 10 percent during the quarter, to $242 million from $220 million, Yahoo! said. But net income fell to $296 million, down from $312 million a year earlier, with adjusted earnings per share stable at 24 cents. Overall revenues shrank 13 percent to $1.32 billion from $1.525 billion a year earlier. Revenues excluding traffic acquisition costs -- the commissions Yahoo! shares with partners in the search ads business -- were three percent lower. Chief executive Scott Thompson, who only joined the company days after the fourth quarter ended on December 31, put a good face on the report. "Yahoo! continued to make progress in the quarter with operating income increasing 10 percent year-over-year," he said in a statement. For the year the results were similar. Revenues after commissions were down five percent, partly blamed on the cut Microsoft takes from its shared search operations. Operations income was up 3.5 percent for the year to $800 million, but net earnings fell 14.6 percent to $1.06 billion, and earnings per share for the year fell to 82 cents from 90 cents. "The year over year decrease was primarily due to the revenue share related to the search agreement with Microsoft," it said in a statement.