Net income declined to $272.26m for the quarter.
Yahoo has reported a 2% rise in its revenue to $1.35bn for the fourth quarter of 2012, compared to $1.32bn it reported for the corresponding quarter in 2011.
The company's net income decreased to $272.26m, compared to $295.5m, for the same period last year.
Revenue from its search operations increased 4% to $482m for the quarter while display revenue declined 3% to $591m.
During the quarter, Yahoo acquired San Francisco-based video chat start-up company, OnTheAir for an undisclosed sum and mobile recommendation app, Stamped for $10m.
Yahoo has also released the new version of its Web email. The move marks the first overhaul of a product since the firm's chief executive, Marissa Mayer, took control over the struggling Internet firm in July.
"During the quarter we made progress by growing our executive team, signing key partnerships including those with NBC Sports and CBS Television, and launching terrific mobile experiences for Yahoo! Mail and Flickr," said Yahoo CEO, Marissa Mayer.
In Mayer's first full quarter as chief executive, Yahoo saw a 4% rise in revenues reaching $1.2bn.
Mayer left Google to join Yahoo in July 2012. She has spent 13 years at Google in a varity of roles.