Just a year after Carol Bartz came aboard Yahoo as CEO, the company on Tuesday reported fourth-quarter earnings that met analyst expectations and buoyed the company’s stock 3.75 percent in after-hours trading.

Sunnyvale, California, Yahoo also reported it expects its first quarter will show the first signs of advertising growth in a year and a half. The troubled search pioneer's next-quarter advertising guidance is significant because it suggests further evidence that an end to the ad industry downturn is near.

“Overall, things seem to be returning to a more normal state in the online ad business,” said a statement from Ms. Bartz, who took over as CEO last January and implemented a companywide restructuring. “These results are not just the result of an improving economic climate. These are the direct result of hard work that culminated in Q4 and will continue into 2010.”

Yahoo reported fourth-quarter revenue of $1.73 billion, down 4 percent from a year ago. Net income matched analyst’s expectations on $153 million, or 11 cents per share, up from a $303 million loss, or 22 cents per share, in the fourth quarter of 2008.

Display advertising revenue grew 26 percent in the fourth quarter compared with the third quarter and was up 16 percent from the same period in 2008. This was a particularly important metric for  Yahoo, considering that its business revolves around display advertising such as online banners etc.

“Our business has positive momentum and we feel good as we head into 2010,” Ms. Bartz said.

This earnings results mark the company’s best performance in over a year, or since Ms. Bartz took on the chief position at Yahoo, taking over for struggling co-founder Jerry Yang.

Last week, search king Google also signaled the Internet ad market was gaining strength when it announced its fourth-quarter revenue rose 17 percent.

Shares of Yahoo rose 3.75 percent in after-hours trading, or $0.60 to $16.59.