January 25, 2007 | posted by Michael Baxter in IABN |

Analysts were celebrating yesterday as Yahoo posted a 61 percent fall in profits. It seems strange, but, as profits fell, shares leapt by almost 6 percent.

Yahoo’s problem is this: Just like eBay, it has to contend with Google breathing down its neck. And, while Google seems to be able to do no wrong, Yahoo has apparently been moving backwards.

But yesterday, analysts looked beyond the last quarter, and celebrated the forthcoming release of Panama - Yahoo’s advertising system for Internet search.

Panama is ahead of schedule. The company is now talking about a 5 February release date, one month earlier than originally predicted.

But, if Panama means medicine for Yahoo’s ills it had better work. In the quarter just gone, net income was just $269 million, or 19 cents a share, versus $683 million a year ago.

Then again, while the media has been talking about the poor quarter at Yahoo and how hopes rest with Panama, we have been searching our archive.

This time last year, the headline net income figure at Yahoo was $247 million, and the massive $683 million was down to a not-to-be-repeated-gain after the dot com star took a 40% stake in Chinese firm Alibaba.com.

So actually, underlying profits at Yahoo are up.

We could find no mention of this in media comment today - history it seems is not the media’s strong point