Yahoo ad revenues nosedive as CEO Marissa Mayer looks to mobile

Decline in ad revenues at Yahoo accelerates, but profits increase following acquisitions

One year on since Marissa Mayer's appointment as Yahoo CEO, the internet company continues to struggle with ad revenues, reporting a decline of 13 per cent for the second quarter of 2013.

The fall in the April-June quarter represents an acceleration in the decline, compared to the prior quarter. Search revenue also fell in the most recent quarter by a figure of nine per cent.

The likely reason behind the decline is the increasing trend for advertisers to buy advertising space through automated exchanges, which in addition to driving down prices compared to negotiating direct with web publishers, enable adverts to be targeted to specific audiences.

Despite the decline in ad revenue, Yahoo profits grew by $331m (£218m) compared with the same period last year, up by 46 per cent, year-on-year. However, most of this jump in profits is as a result of Yahoo's investment in Alibaba, a Chinese e-commerce website.

Speaking via a webcast, Mayer didn't focus on Yahoo's continued decline in revenue, and instead focused on the company's push into the mobile market.

"We reached a pace of launching a new product almost every week," said Mayer.

The company has made a spate of acquisitions under Mayer's leadership in an effort to widen its social and mobile presence, and direct advertising to new audiences.

Yahoo's purchasing of social media site Tumblr for $1.1bn in May marks the most high-profile purchase, while in recent months the company tried - and failed - to buy video site Hulu, but completed the purchase of mobile email management app Xobni.

The company's earnings report has targeted four key areas for future growth: search, mobile, display and video. Yahoo is particularly positive about mobile and announced it has recently passed 340 million mobile users a month following the launch of new apps.

Speaking during the Yahoo earnings webcast, Mayer said that she was pleased with the direction Yahoo is moving and the changes that she has made over the past year would set the company up well for the future.

"We saw continued stability in our business, strengthened our team, and started the year with fast execution against our products and partnerships. We are moving quickly to roll out beautifully designed, more intuitive experiences for our users," she said.

Yahoo's focus over the next year will be on "smart spending, and investing in our core business to deliver revenue growth," she added.