SAN FRANCISCO (AP) – Yahoo is still struggling to boost revenue nearly three years into CEO Marissa Mayer’s tenure, magnifying concerns that the Internet company holds little value beyond its lucrative Asian investments.
The latest evidence of Yahoo’s financial malaise emerged Tuesday with the release the company’s first-quarter earnings report.
After accounting for ad commissions, Yahoo’s revenue fell 4 percent from the same time last year to $1.04 billion, extending a troubling trend that began before Mayer took over. That downturn overshadowed an 8 percent increase in Yahoo’s total revenue, before commissions, because investors focus on the amount of money that the company retains after paying its partners for helping to draw online traffic to it ads.
Those expenses, known as “traffic acquisition costs,” quadrupled from the same time last year, an indication that Yahoo is paying a steep price to show its advertising.
The Sunnyvale, California, company also poured substantially more money into developing new products, contributing to a steep drop in Yahoo’s first-quarter earnings. Investors already had driven down the company’s stock by 12 percent so far this year before Tuesday’s numbers came out. The shares shed another 67 cents to $43.82 in extended trading.