Yahoo Inc. took drastic steps in the last quarter of 2010 in order to increase profits – but despite the cost cutting measures, revenue declined 12% overall.

The company also made two rounds of layoffs in as many months. Compared to Google and Facebook, which are both hiring aggressively, Yahoo seems to be going in the wrong direction of a slow downward spiral.

Yahoo is also dealing with a weak profit projections for the current quarter, which resulted in a 2% drop in its stock. The company partnered with Bing to provide search engine results, while Yahoo concentrated on advertising and the look of the search engine. The former has paid off somewhat – in the fourth quarter Yahoo saw a 16% increase in display advertising revenue.

This performance factor alone won’t be enough to reverse Yahoo’s downward direction, but it is certainly a positive step in the right direction.