Yahoo exceeded analyst revenue and earnings expectations in its fourth quarter.

The company generated revenue of $1.702 billion for the quarter ended 31 December 2006 — a 13 per cent increase over the same quarter in 2005, it said on Tuesday.

Subtracting the commissions it pays to advertising partners, Yahoo had revenue of $1.228 billion, up 15 per cent and topping the consensus expectation of $1.219 billion from analysts polled by Thomson Financial.

Net income came in at $269 million, or $0.19 per share, including $56 million of stock-based compensation expense, recorded under the fair value method. This compares with net income of $683 million, or $0.46 per share, including $11 million of stock-based compensation expense, recorded under the intrinsic value method, for the same period of 2005.

On a pro forma basis, which excludes certain items, net income was $229 million, or $0.16 per share, exceeding analysts' consensus expectation of $0.13 per share.