Search engine Yahoo saw its shares fall to their lowest level for four years yesterday, with the news that the company’s profits fell by 24% in the fourth quarter of 2007.

Wall Street was concerned by the results, and shares in the company fell by 8% after the announcement. The company also announced plans to cut 1,000 jobs, or around 7% of its total workforce.

Yahoo has struggled to compete with Google in the search stakes, and has lost much of its audience to its rival, as well as social networks.

According to Nielsen/NetRatings, Yahoo accounted for just 17.7% of searches in the US last month, down from 19.9% in August. In the same period, Google’s share of searches grew from 53.6% to 56.3%. In the UK and other markets, the gap is much wider.

Chief executive Jerry Yang had previously stated that the company would focus on priorities, making Yahoo a starting point for web users, improving its home page, search engine and webmail services.
Yahoo’s Project Panama, a long awaited fix for its search advertising system has shown some promising early results, but the company is still losing out on ad revenues to Google.