Revenue came in at US$1.53 billion in the quarter, ended Dec. 31, 2010, down 12 percent year on year. Subtracting the commissions and fees Yahoo pays to advertising partners, revenue was $1.21 billion, down 4 percent but slightly topping the consensus expectation of $1.19 billion from analysts polled by Thomson Financial.

Net income slightly more than doubled to $312 million, or $0.24 per share. On a pro forma basis, which excludes certain items, net income was $340.5 million, or $0.26 per share, $0.04 above analysts' consensus expectation.

During the fourth quarter, Yahoo continued to do well in its specialty, display advertising, but still struggled in search advertising, the most popular online ad format, which Google dominates. Yahoo's gross display ad revenue rose 14 percent to $635 million, while search ad revenue fell 27 percent to $640 million.