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Last Updated: Tuesday, 17 January 2006, 22:54 GMT
Yahoo's latest results disappoint
Yahoo chief executive Terry Semel
Yahoo has previously seen stellar profits growth
Shares in Yahoo fell 12% in after-hours trading on Tuesday, after its results failed to meet market expectations.

The web giant made a post-exceptionals net profit of $247m (140m) or 16 cents a share for its fourth quarter, below Wall Street's predicted 17 cents.

Overall net income for the last three months of 2005 shot up 83% to $683m compared to a year earlier.

But the figures were aided by a one-off gain, Yahoo's taking a 40% stake in Chinese firm Alibaba.com.

Sector-wide effect

Yahoo's fourth-quarter revenues were up 39% to $1.5bn.

Computer sector analysts said the results were disappointing and would more than likely have a negative knock-on effect on the wider internet sector.

Google's shares dropped 2.5% in Tuesday post-close trading.

"It's a miss versus expectations. I would expect both Yahoo and Google to sell off," Scott Devitt, an analyst with brokerage Stifel, Nicolaus & Co, said.

Yahoo's underlying profit growth was aided by the continuing migration of advertising to the internet from more traditional media sectors such as print.

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