Updated from 4:59 p.m. EST

Yahoo!'s ( YHOO) fourth-quarter profit beat Wall Street estimates, but the company's light revenue outlook for 2008 suggests a turnaround is not yet at hand.

Shares of Yahoo! were recently off $2.24, or 10.8%, to $18.56 in after-hours trading.

And the company's plans to trim its workforce didn't win over investors.

In a conference call Tuesday for investors, the company said it expects to cut about 1,000 jobs -- about 9% of its employees -- in the coming quarter as it continues to shift its strategy.

But Yahoo! also will continue hiring in areas it sees as key to its growth. "Rather than make cuts across the board, we will make targeted cuts against targeted investments," Yahoo! CEO Jerry Yang said in the call.

The online portal operator said net income for the fourth quarter fell to $206 million, or 15 cents a share, from $269 million, or 19 cents a share, a year earlier.

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Revenue came in at $1.8 billion for the quarter, an 8% increase compared to $1.7 billion for the same quarter a year ago.

Excluding traffic acquisition costs, revenue came in at $1.4 billion, a 14% increase compared to the $1.2 billion for the same period a year ago.

Analysts surveyed by Thomson Financial/First Call expected earnings per share of 11 cents on revenue excluding costs of $1.41 billion.

"This is a pivotal time for Yahoo!'s business and we have a unique window of opportunity right now to make the necessary, game-changing investments that will help us capture a significant piece of the growing ad market and create substantial long-term value for our shareholders," Yang said in a press release.

For the first quarter, Yahoo! said it expects revenue between $1.28 billion and $1.38 billion.

Analysts had forecast earnings of 11 cents on revenue of $1.36 billion.

For the full year of 2008, Yahoo! said it expects revenue of between $5.35 billion and $5.95 billion.

Analysts had expected earnings of 52 cents on revenue of $5.88 billion.

Yahoo! also announced that it had appointed Ari Balogh, formerly the chief technology officer of VeriSign ( VRSN), to the identical role. That spot had been vacant at Yahoo! since May, when outgoing CTO Farzad Nazem retired after 10 years in the role.

"Bringing a strong technology leader on board to drive engineering and operational excellence across our technology group has been a significant priority for the company," Yang said in a press release.

Yahoo! also unveiled a multiyear agreement with AT&T ( T)to share ad revenue from mobile phones and personal computers on Tuesday. Financial terms of the deal were not disclosed.

"2008 marks a key year in our transformation and in the many priorities we have deployed," Yang said. "We have a real sense of urgency about the opportunities we face."