Yahoo's 2006 profits plunged by more than half compared with 2005 despite a rise in revenues from the internet search giant's newly revamped advertising platform.
Yahoo posted net income of £268.7m, or 19 cents per share, in its 2006 fourth quarter, sharply lower than a year ago. The company said 2006 fourth-quarter revenue rose to $1.7 billion, up 13% from a year ago.
For the full year, the company posted a profit of slightly more than $751m, sharply lower than the $1.9 billion reported for 2005.
The Yahoo stock price climbed in after-hours US trading on investor hopes that the company's reorganisation last year and a new Project Panama advertising platform boded well for its future. Chief executive Terry Semel said a new formula to prioritise placement of advertisements on search results pages based on keywords, quality and bid price will be launched by Yahoo on February 5.
Yahoo has made the mobile internet search and advertising market a priority, Semel continued, noting a deal to have its software on Apple's new iPhone devices and another with Vodafone.
Yahoo's outgoing chief financial officer Sue Decker predicted revenue for the first quarter of 2007 would grow only 8% before the Project Panama ad platform 'was in full effect' and the economic picture improved through the rest of the year.
