Online search engine operator Yahoo Inc. said Tuesday that its fourth-quarter profit declined a bit more than 23 percent as higher operating expenses overshadowed an increase in revenue.

4th fourth net earnings were $205.7 million, or 15 cents a share, down from $268.7 million, or 19 cents a share, in the year-ago period.

Excluding items, the company posted an adjusted profit of $280 million, or 20 cents a share, versus $297 million, or 21 cents a share, last year.

Analysts polled by Thomson Financial, on average, expected earnings of 11 cents per share

The company said its revenue rose to $1.83 billion during the period, aided by an increase in revenue from marketing services for owned and operated sites. This compares with $1.7 billion in the year-earlier fourth quarter.After subtracting commissions paid to Yahoo’s advertising partners, the company reported fourth-quarter revenue of $1.40 billion, just shy of Wall Street’s projection of $1.41 billion.

The company’s operating expenses rose year over year to $938.9 million from $703.7 million, due mostly to increases in sales and marketing and product development costs.

For the first quarter, Yahoo expects revenue of $1.68 billion to $1.84 billion, or $1.28 billion to $1.38 billion excluding commissions paid to advertising partners. Analysts expect revenue, excluding the commissions, of $1.37 billion in the first quarter.

For the year, Yahoo expects revenue of $7.20 billion to $8.00 billion, or $5.35 billion to $5.95 billion excluding the commissions. For the year, analysts expect $5.90 billion in revenue, excluding the commissions.

Yahoo shares declined $1.15, or 5.5 percent, to $20.81 in after-hours trading, as the company provided disappointing revenue guidance for the first quarter and 2008.