Revenues slipped to $1.27bn as intense competition with rivals pushed the amount of money Yahoo! can charge for advertising space down by 7pc year on year
Shares in Yahoo! fell nearly 7pc to as low as $35.60 in after-hours trading on Tuesday, as lacklustre fourth quarter results laid bare the struggle the internet company still faces if it is to turn itself around.
Revenues slipped 6pc to $1.27bn, in line with analysts’ forecasts, as intense competition with rivals such as Facebook and Google pushed the amount of money Yahoo! can charge for advertising space down by 7pc year on year. The decline marked the fourth drop in sales in four quarters.
Profits increased 28pc to $352m, helped by a windfall from the sale of some of Yahoo!’s patents. However, once the windfall was stripped out, underlying profits fell.
Mrs Mayer, who left Google to take the helm of Yahoo! in mid-2012, said the company had created a stable foundation for growth in the future.
“I’m encouraged by Yahoo’s performance in Q4 and 2013 overall,” she said. “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.
However, analysts were less than convinced.
“It’s a dismal outlook,” said Colin Gillis, an analyst at BGC Partners in New York. “There’s going to be more pressure to perform as the year progresses.” He added that Yahoo!’s “core business” seemed to be shrinking.
Earlier this month, Mrs Mayer fired Henrique de Castro, Yahoo!’s chief operating officer, whom she had poached from Google. According to reports, she blamed Mr De Castro for the fact that yahoo! was not making faster progress wooing advertisers.
On Tuesday, she said that his departure was “ultimately…about fit.” “That was a very regrettable conclusion, and we tried to avoid it, but ultimately it was the right decision for the company,” she said.