SAN FRANCISCO (AP) — Yahoo CEO Marissa Mayer insists the long-stumbling Internet company has finally regained its stride, even though its revenue is still stuck in reverse.
The latest evidence of the challenges facing Mayer emerged Tuesday with the release of Yahoo's fourth-quarter results.
While Mayer hailed product improvements that have helped attracted more traffic to Yahoo's services, investors focused on a drop in revenue that underscored the difficulty that the company is having competing for online advertising against Google Inc., Facebook Inc. and other rivals.
Yahoo Inc. had hoped to shift the financial tide when it lured Mayer away from a top job at Google 18 months ago.
Mayer, 38, has succeeded in creating a bigger buzz around Yahoo with her panache and a series of acquisitions aimed primarily at the mobile device market. But the signs of a sustainable turnaround remain elusive. She has repeatedly said it may take several years for Yahoo's ad sales to surge, though on Tuesday she promised a "modest acceleration" in revenue growth during the second half of this year.
Revenue dropped 6 percent in the fourth quarter, the same rate of decline experienced for all of 2013.
Yahoo's earnings have been steadily rising under Mayer's leadership because of cost-cutting measures and lucrative investments in two Asian Internet companies: China's Alibaba Group and Yahoo Japan. Both investments were made before Mayer's arrival. The income from those two investments accounted for nearly two-thirds of the company's earnings during the final three months of last year.
Yahoo Inc., based in Sunnyvale, Calif., earned $348 million, or 33 cents per share, a 28 percent increase from $272 million, or 23 cents per share, a year earlier.