And it announced a two-for-one stock split after its shares reached over $400 a share.

But the news, which came after the market closed, did not prevent a big sell-off of Internet stocks on the markets today.

Yahoo said its revenues increased by nearly 50%, from $53m to $76m, between the third and fourth quarters of the year, while profits were up from $16m to $25m.

But although that was higher than analysts' estimates, it may not be enough to justify the company's $50bn value. It is now worth twice as much as Boeing or Texaco.

Shares in Yahoo fell in after hours trading to below 400 after falling 13 7/8 during the trading day.

Traffic still growing

Internet use is growing fast

Yahoo said the number of people who used its site continued to grow, with 167m page views a day in December, compared to 144m in September.

The company said it had a particularly strong Christmas, with e-commerce booming. Yahoo receives a fee from some of the retailers linked to its site when people click through to their address.

The company also announced deals with two key computer makers to make Yahoo the default internet connection on their machines. IBM said its Aptiva personal computers would default to Yahoo, as would the Hewlett Packard Pavillion range.

New competition

But Yahoo now faces new and powerful competition when Disney unveiled its new GO website, which will run in conjunction with Infoseek, partly owned by Disney.

The new site aims to integrate the Disney, ABC, and Infoseek brands, and will be backed by a multi-million dollar advertising campaign.