Its new CEO, Carol Bartz, appointed two weeks ago, acknowledged in a conference call that the company has problems, but expressed optimism about its future. "I've encountered a wonderful energy, a real can-do attitude, a robust product pipeline and a tremendous dedication to making the experience of our users and advertisers the best they can possibly be," she said.

"To be sure, there are also fundamental issues that need to be addressed: sharpening our strategic focus, improving the pace of decision-making and continuing to streamline the business," she added. "I intend to move quickly to tackle these core issues and capitalize on all the incredible opportunities that exist at Yahoo."

Revenue was US$1.81 billion, a 1 percent decrease compared to 2007's fourth quarter. Subtracting the commissions it pays to its ad network partners, Yahoo had revenue of $1.37 billion, down 2 percent but in line with the consensus estimate from analysts polled by Thomson Reuters.

Yahoo posted a net loss of $303 million, or $0.22 per share, compared to net income of $206 million, or $0.15 per share, in 2007's fourth quarter.

On a pro forma basis, which excludes certain items, net income was $238 million, or $0.17 per share, $0.04 per share above the analysts' consensus expectation.