Yahoo profits up on cost cuts

YAHOO more than doubled its fourth-quarter earnings year-on-year yesterday following cost-cutting measures, but revenues fell as it struggled to make online advertising pay.

The search firm made net fourth-quarter income of $312m (£197.3m) or 24 cents a share, up from $153m, or 11 cents a share, in the same period the previous year, it reported yesterday.

But net revenue fell four per cent to $1.20bn, from $1.26bn a year earlier, as it battled rivals such as Facebook and Google that have mastered the art of making money from online adverts.

Revenue from display adverts rose 16 per cent before costs, but revenue from search adverts fell by 18 per cent before costs, the company said.

California-based Yahoo said search revenues dipped due to its revenue share deal with Microsoft, which routes all search-based adverts through the software firm’s platform. Total revenue, which included the amount it shared with Microsoft, fell 12 per cent to $1.53bn, from $1.73bn a year earlier.

It was also downbeat on the outlook, forecasting net first-quarter 2011 revenue of $1.02 to 1.08bn, below analyst forecasts of $1.13bn.

•The results are in sharp contrast to the record earnings announced by Google last week. Yahoo’s earnings boost was achieved through cost-cutting measures including redundancies and it said it would cut a further 600 staff. Google has said it will recruit a record number of staff this year, beating 2007’s level of 6,000 hires.