Wall Street will have to continue its wait. Yahoo on Tuesday reported third-quarter results that gave little to cheer in that regard. Adjusted display ad revenue slid 7%, to $421 million, from a year ago. Search revenue edged up 3%, at $426 million, on an adjusted basis.
Yahoo shares closed 1.8% lower, at $33.88, in regular trading and remained flat in after hours.
"Signs of a fundamental turnaround at Yahoo would begin with a recovery in its user engagement levels. And so far, there isn't evidence of this," said Mark Mahaney, analyst with RBC Capital Markets, ahead of Yahoo's report.
Analysts expect Yahoo's share of the U.S. display advertising market to shrink to 7.5% in 2013, down from 9.2% last year, according to eMarketer. Google is expected to increase its position to 17.4%, up from 15.3% last year. Facebook's share is expected to surge to 17% this year, up from 14.8% last year.
Yahoo's stock pop under Mayer — it has more than doubled — is largely attributed to its holdings in Alibaba. The Chinese e-commerce giant is expected to go public and could command an $80 billion valuation. That would make Yahoo's 24% stake worth roughly $19 billion.
Mayer is the sixth CEO in six years at Yahoo. The troubled Internet pioneer's top spot had become a revolving door of those unable to correct its course in a losing advertising battle against Google and Facebook. Twitter is expected to nearly double its advertising revenue by next year, posing another challenger.
Yahoo reported net income of $296 million, or 28 cents per share, on revenue of $1.08 billion.
Analysts expected Yahoo to report third-quarter net income of $356.5 million, or 33 cents per share, on revenue of $1.08 billion, according to the survey of estimates from Thomson Reuters. That's a decline from net income of $420.7! million, or 35 cents a share, on revenue of $1.09 billion in the same period a year ago.
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