Earthlink Inc. on Tuesday reported an increase in net income for the fourth quarter, as the Internet service provider cut expenses to offset a drop in revenues.

The Atlanta-based company said net income for the quarter ended Dec. 31 increased to $35.6 million, or 23 cents a share, from $10.7 million, or 7 cents a share, in the same period a year ago. Revenues dropped 3 percent to $338.1 million.

"EarthLink achieved record net income in 2004, benefiting from greater operational efficiencies and lower telecommunications costs," Garry Betty, president and chief executive of Earthlink, said in a statement.

To boost revenues in 2005, the company planned to invest in new initiatives, such as its recently announced wireless services available through a joint venture with SK Telecom, Betty said.

"In addition to offering innovative wireless services and applications, we will also take advantage of the growing convergence of data and voice technologies to launch expanded VoIP (voice over Internet protocol) and other wire-line voice services," Betty said.

Earthlink has struggled to hold on to its subscribers as cable, DSL and other broadband services have become available from larger competitors, such as telephone companies and cable TV operators, that are offering bundled services.

Earthlink's customer base overall in the fourth quarter declined by 14,000, as its net premium dial-up subscriber base decreased by 211,000. EarthLink ended the quarter with 1.4 million broadband customers, an increase of 28.6 percent from a year ago, and 3.9 million narrowband subscribers, a decrease of 2.6 percent.

For the full year, net income rose to $111 million, or 70 cents a share, from a net loss of $66.8 million, or 42 cents a share, in 2003. Revenues, however, dropped 1.4 percent to $1.38 billion.