World and Nation

Shares of Yahoo fall after it reports drop in revenue

SAN FRANCISCO — Yahoo still lags far behind its major Internet competitors, but the company’s performance under Marissa Mayer continues to improve.

The Internet portal and web publisher reported fourth-quarter revenue of $1.27 billion Tuesday, down 6 percent from $1.35 billion in the same quarter a year ago. That was roughly in line with Wall Street’s expectations.

But the company was more profitable than expected. Net income for the quarter, which ended Dec. 31, was $352 million, or 33 cents a share, up from $274 million, or 23 cents a share. However, the results were lifted by a $49 million gain from the sale of patents. Using a measure of profits that focuses only on operations, Yahoo’s profits declined.

“I’m encouraged by Yahoo’s performance in Q4 and 2013 overall.

We saw continued stability in the business, and our investments allowed us to bring beautiful products to our users and establish a strong foundation for revenue growth,” Mayer, who was appointed chief executive in mid-2012, said in a statement.

Yahoo shares, which had gained more than 4 percent in regular trading Tuesday before the results were released, gave back all of those gains in after-hours trading.

Mayer has unveiled a host of initiatives in recent months, including digital magazines focused on technology and food, and new mobile apps for the weather, news and email.

She has also been on an acquisition spree, including buying the blogging site Tumblr last year for $1.1 billion. Still, she has acknowledged that the company has been slow to make mobile applications a priority.

Yahoo’s operating results have long been overshadowed by its share of revenue and income from Alibaba, a fast-growing Chinese Internet company in which Yahoo holds a 24 percent stake. Most investors are valuing Yahoo’s stock more on its ownership of Alibaba than on its core business.

Yahoo said revenue from search advertising decreased at a slower rate in the fourth quarter, down 4 percent from the year-ago quarter. Revenue from display ads fell 6 percent. The company sold more ads, but at lower prices.

Yahoo is still the most popular web destination among desktop computer users in the United States, with 195 million unique visitors in December, according to comScore.

But the company has steadily lost ground in advertising against competitors like Google and Facebook. It had 5.8 percent of the U.S. digital ad market in 2013, according to eMarketer.