Yahoo's Q4 sales light as new CEO takes helm

Yahoo's fourth quarter sales were light, but earnings were on target in Scott Thompson's debut as CEO.

Thompson had little to do with the quarter given he was just hired, but he'll be on the hook for future results. On a conference call, Thompson outlined his view on Yahoo. He said:

Our users really need to see the value in stopping by Yahoo to consume content and use our services more frequently and advertisers need to know that we see our success as being defined by their success. We have to find the customer balance in our decision making and our prioritization and in our execution. That's my first point about balance with our customers. Second, is balance in who we're. Yahoo is fundamentally both a media company and a technology company. We need to be great at both. Our media leadership is imperative and we have alone continue to develop best in class product, engineering and technology expertise. So, we end the debate about which is more important. We are both a media company and a tech company. We must do both. End of the discussion.

The company reported earnings of $296 million, or 24 cents a share, on revenue of $1.17 billion, down 3 percent from a year ago. The revenue total excludes traffic acquisition costs.

Wall Street was looking for fourth quarter earnings of 24 cents a share on revenue of $1.19 billion.

In its statement, Yahoo outlined how its search deal with Microsoft impacts sales. Yahoo noted that the decrease in revenue was largely attributed to its Bing deal with Microsoft, which garners 12 percent of net revenue.

The fourth quarter results from Yahoo reflect $48 million in search operating cost reimbursements to Microsoft. These costs are expected to decline as Yahoo moves all markets to Microsoft's search platform.

As for the outlook, Yahoo projected first quarter revenue of $1.025 billion and $1.105 billion excluding traffic acquisition costs. Wall Street was looking for revenue of $1.08 billion.

Thompson noted that 2012 will mean Yahoo will "be aligning resources behind key areas of focus to enable us." His aim is to ultimately grow the business.

Here's the outlook in depth.