CALIFORNIA, USA: Yahoo Inc's net revenue and profit fell slightly in the fourth quarter, as it experienced year-over-year declines in both its search and display ad business.

Shares of the company were down 4 cents at $15.65 in after-hours trade.

Yahoo Chief Financial Officer Tim Morse said that macroeconomic factors, particularly in Europe, resulted in weaker than expected display advertising revenue in the fourth quarter and continued to be a concern.

"We still look out, especially upon Europe, with some caution," Morse told Reuters in an interview on Tuesday.

But he said Yahoo was seeing some positive trends in the new year, noting that some large advertisers that had limited their ad spending with Yahoo in 2011, had already committed to "meaningful upfronts" in 2012.

The struggling Internet company, which installed Chief Executive Scott Thompson to take the reins earlier this month, projected that its net revenue in the first quarter would range between $1.025 billion and $1.105 billion.

Yahoo fired former CEO Carol Bartz in September, and co-founder Jerry Yang abruptly resigned, two weeks after Thompson's appointment.

The company earned $296 million in net income in the three months ended December 31, or 24 cents a share, compared with $312 million, or 24 cents a share, in the year-ago period.

Analysts polled by Thomson Reuters I/B/E/S were expecting 24 cents per share in profit.

In the fourth quarter, Yahoo reported net revenue, which excludes fees that Yahoo shares with Web partners, of roughly $1.17 billion, compared with $1.205 billion the same time last year.

Display ad revenue, Yahoo's main source of revenue, totaled $612 million for the quarter. Search ad revenue for the quarter came in at $465 million, $48 million of which stemmed from its partnership with Microsoft.