Yahoo! has reported a loss in the last three months of 2008 as the economic downturn hit sales of online ads.
Its figures showed a loss of $303.4m compared with a profit of $205.7m a year earlier.
But analysts had said that the company had weathered the downturn better than expected, with the loss mainly due to one-off costs.
The result come as Carol Bartz take over from Jerry Yang as the firm’s new chief executive.
Mr Yang stepped down following his rejection of a $47.5bn takeover offer from Microsoft last year, which rankled the company’s shareholders.
“The company made important investments while aggressively managing costs, leaving us better positioned to weather the economic downturn and emerge stronger when advertiser spending improves”, said Ms Bartz.
However, she gave a cautious outlook for the beginning of the year 2009. The company said its first quarter revenue will range from $1.53bn to $1.73bn, a decline from $1.82bn at the same time last year.