Yahoo profits rise 86 per cent in 2010 to US$1bn

As profits rose Yahoo cut another 100 staff. The latest job cuts brings to more than 700 the number who have been axed in the past six weeks leaving Yahoo with 13,600 staff worldwide.

Over the whole calendar year, Yahoo generated an income, before tax, of US$1 billion helped by pre-tax profits doubling to US$227.6 million in the last quarter.

Revenue for the digital specialist was down four per cent for the quarter to US$1.2 billion. The revenue drops were primarily attributed to its search agreement with Microsoft.

Under the agreement, Bing powers Yahoo search in the US and Canada, giving Microsoft a 12 per cent share of revenue generated.

Revenue for search fell 18 per cent to US$388 million for the quarter and it expects it to decline further over the next year as Yahoo extends the Microsoft search agreement to its other markets.

Display advertising revenue for the quarter was up 16 per cent to US$567 million.

As part of its drive for profitability, Yahoo made hundreds of redundancies in December 2010 and confirmed a smaller round of lay-offs, in the region of 130 employees, prior to the results being announced yesterday (26 January).

Carol Bartz, chief executive at Yahoo, said, "We just completed a very encouraging quarter and year for Yahoo, where we saw our plans to turn around the company gain momentum."

Yahoo still continues to lose share to its rivals, however. Last week, Google reported a 26 per cent increase in revenue to US$8.4 billion for the forth quarter, with a rise in net income to US$2.5 billion.

Meanwhile Facebook is believed to have generated US$1.2 billion in revenue and a net income of US$335 million in the first nine months of 2010.

This article was first published on mediaweek.co.uk.