Yahoo’s revenue fell 3% in the last quarter, its fourth decline in the past five quarters, the tech company announced on Tuesday.
The disappointing news comes after Yahoo chief executive Marissa Mayer has been on a buying spree, hoping to turn the fortunes of one of the first generation of internet giants as it has struggled to keep up with Facebook and Google.
Total revenues for the second quarter were just over $1bn, down from $1.1bn for the same quarter last year. Revenue from display advertising, excluding traffic costs, fell 7% to $394m.
“Transformation is not a singular event,” said Mayer, who joined the company from Google in 2012.
She said on a conference call that the decline in display advertising highlighted “the fact that we need to work faster to ameliorate the negative trends. I believe we can and will do better moving forward.”
Yahoo's share of the $140bn digital ad market will fall from 2.86% in 2013 to 2.52% this year, according to eMarketer. Google dominates the market, with 31.45%.
Under Mayer, Yahoo has been trying to reverse that trend by concentrating on content, buying the blogging platform Tumblr for $1.1bn last May, hiring high-profile talent including former CBS Evening News anchor Katie Couric and broadcasting TV shows, including NBC's canceled Community.
This week the company announced it would be broadcasting a series of live concerts by artists including Dave Matthews Band, Kiss, Justin Timberlake and Usher.
The disappointing results come as Yahoo prepares to cut its 22% stake in Chinese internet giant Alibaba, which is planning an initial public offering, the largest ever tech IPO, in August.
Yahoo said Tuesday it had agreed to reduce the number of shares it is required to sell at the IPO to 140m shares from 208m shares. Analysts are expecting Yahoo to make $10bn from the sale. The company said it is committed to returning at least half of the after-tax IPO proceeds to shareholders.
"Our top priority is revenue growth and by that measure, we are not satisfied with our Q2 results,” said Mayer. She said several areas showed strength, including Yahoo Search, up 6% year-over-year, and social, mobile, video and native advertising, which collectively grew nearly 90% year-over-year. "Overall, I remain confident in Yahoo's future, our strategy, and our return to long-term growth,” she said.
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