Yahoo reports another sales drop as ad clicks yield less

Yahoo reported a 5 percent drop in revenue for the third quarter, with the money it makes from display and search ads both continuing to decline.

Revenue for the period ended Sept. 30 was $1.2 billion, down 5 percent from a year earlier, Yahoo said Tuesday. Excluding traffic acquisition costs, revenue was down 1 percent.

Its profit for the quarter was $297 million, much lower than last year, when it made a big one-off gain from selling shares in China’s Alibaba Group. On an operations basis, Yahoo’s profit for the quarter was $93 million, a drop of 39 percent.

“I’m very pleased with our execution, especially as we’ve continued to invest in and strengthen our core business,” CEO Marissa Mayer said in a statement.

Mayer took over the company last July and is trying to restore Yahoo to its glory days, by making products like Yahoo Mail cool again. She’s also made a string of acquisitions, including Tumblr for $1.1 billion.

Yahoo sold slightly more display ads last quarter than it did a year earlier, but the price per ad (excluding Korea) fell, bringing display revenue down by 7 percent, to $470 million, the company said.

It also sold more clicks on ads—they were up 21 percent from last year—but the price per click (excluding Korea) also declined, by 4 percent. Search revenue overall fell 8 percent in the quarter, to $435 million.

Mayer was due to address investors and analysts Tuesday afternoon. She shuns the usual analyst conference call for a webcast that can be viewed here, at 2 p.m. local time.

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