Yahoo Inc missed the revenue as well as profit forecasts of Wall Street as a slight amount of growth in its advertising business online was offset by large payments to its partners and websites that send readers to its site.
However, Yahoo shares were up 1.4% in extending afterhours trading on Tuesday after Marissa Mayer the CEO said Yahoo hired advisers to determine its most promising opportunities for its share in Yahoo Japan.
Investors have urged Mayer to liquidate the stake following the announced Yahoo plans to spin off its position in Alibaba the Chinese e-commerce giant.
For the 2015 first quarter, Yahoo said is revenue from display advertising was up 2.3% to end the quarter at $463.6 million, which accounts for close to 40% of its complete revenue. Revenue from its search business was 19.5% higher compared to the same period last year ending the quarter at $531.6 million.
Yahoo announced that its deal to become the Mozilla’s default search engine boosted the volume of searches. However, the cost of that deal, which Yahoo had not disclosed, contributed to a big rise of $137 million in costs of traffic acquisition. Both search and display revenue dropped after those costs were factored in.
There has been no turnaround, said one analyst.
Overall growth in revenue stalled of recent as the once hot Yahoo Web portal and its email service has lagged behind its rivals such as Facebook and Google.
Net income that was attributable to Yahoo dropped to just over $21.2 million equal to 2 cents a share, for the recently ended quarter, compared to last year during the same period of $33.15 million equal to 29 cents a share.
Revenue, after reducing fees that are paid to its partner websites, dropped to $1.03 billion from its previous $1.09 billion.
Analysts were expecting 18 cents a share profit on $1.06 revenue.
