While Google’s ad revenue is on a high, Yahoo is in decline with drops in both display and search advertising revenue for quarter four, 2011.

The search group also experienced decline in its overall revenue and net income. Excluding commissions paid to partners, Yahoo’s revenue dropped 3% to $1.17 billion for the quarter ended 31 December, compared with $1.21 billion in the same period last year.

Display ad revenue dropped from $567 million to $546 million year over year, a decrease of 4%. Search revenue was down 3%, falling to $376 million from $388 million.

Having only been in the job three weeks, newly installed CEO Scott Thompson outlined his plans for the year ahead: “In 2012 we will be aligning resources behind key areas of focus to enable us to move aggressively in market and grow our business, bringing innovative new products and experiences to both our users and advertisers.”

The company released the following fourth quarter 2011 revenue highlights:

  • Display revenue excluding traffic acquisition costs (ex-TAC) was $546 million, a 4% decrease compared to $567 million for the fourth quarter of 2010,
  • display revenue was $612 million, a 4% decrease compared to $635 million for the fourth quarter of 2010,
  • search revenue ex-TAC was $376 million, a 3% decrease compared to $388 million for the fourth quarter of 2010, and
  • search revenue was $465 million, a 27% decrease compared to $640 million for the fourth quarter of 2010.

In brighter news for the company, income from operations increased 10% to $242 million in the fourth quarter of 2011, compared to $220 million in the fourth quarter of 2010.

With more than 130 sites across the global Yahoo! Publishing Platform, the firm plans to increase its digital footprint in 2012 and has invested in lifestyle, mail and social TV apps to boost its network.

An agreement between Yahoo, AOL and Microsoft allows ad networks operated by the three companies to offer each other’s premium, non-reserved online display inventory to their respective advertising customers.