The share price of Yahoo fell last night (January 29th) in the US after the company confirmed a drop in revenue in its latest financial results.
It was announced by the firm that its profits were up 28 per cent to $348 million (£210 million) from October to December, though revenue from display ads fell by six per cent in the quarter.
Stocks fell by five per cent in the US on the back of the news, but the share price of Yahoo has still been one of the major success stories of the last 12 months, rising by 80 per cent.
Yahoo's share of the US digital ad market has been falling in recent months and according to the latest available data from eMarketer, its section declined to 5.8 per cent in 2013 from the level of 6.8 per cent that was recorded in 2012.
Chief executive of Yahoo Marissa Meyer, who made headlines in 2013 by banning Yahoo staff from working from home, hailed the relaunch of products such as Yahoo Mail and Yahoo Finance as being successful in the last few months.
"We saw continued stability in the business, and our investments allowed us to bring beautiful products to our users and establish a strong foundation for revenue growth," said Ms Mayer.
However, figures from eMarketer show that Facebook recently surpassed Yahoo as the number two digital advertising seller in the US, indicating the future could be difficult for the firm.
Despite the falling revenues from display ads initially damaging the share price of the company, its stocks remain close to a new 52-week high for Yahoo.
Ms Mayer will face a number of challenges during her stewardship of the firm in the next few years, as companies such as Google become increasingly dominant in the internet sector.
Starting as an internet search company, Google has gone on to become one of the world's largest organisations in recent years and is now working on wearable technology and self-driving cars among its latest developments.
Find up to date information on the FTSE 100 and spread betting strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.