The Internet giant reports third-quarter earnings, which were slightly better than the previous year and better than most analyst expectations.
Can Yahoo CEO Marissa Mayer turn it around?

That's the question following Yahoo's third-quarter earnings report, in which it reversed a downward trend by claiming rising revenue.

The results help to decrease investors' anxiety about the Web giant, which has been facing slumping revenue as marketers increasingly flock to advertise with Google and Facebook instead of Yahoo.

To allay investors anxieties, Yahoo for the first time disclosed its revenue from mobile display ads. Mayer said that mobile revenues topped $200 million in the third quarter, but didn't provide any historical comparison. She said she expects that number to rise to $1.2 billion by the end of the year.

"I am also pleased to report today that our revenue in mobile is now material," Mayer said.

For the three months ended September 30, Yahoo said sales, excluding what the company pays partners to drive traffic to its properties (known as traffic acquisition costs), rose a little more than 1 percent to $1.09 billion. Profit, minus some costs, was 52 cents a share. Analysts were expecting sales of $1.04 billion and profit of 30 cents a share, down slightly year over year.

Yahoo shares were up 2.7 percent in early after-hours trading. The company shares are roughly flat so far this year.

The company faces intensified pressure since Alibaba, the Chinese e-commerce giant, went public last month. Mayer arrived in 2012 in an attempt to turnaround the lumbering company, but the bright spot in her effort has been the company's stake in Alibaba -- a deal made almost a decade ago by Yahoo co-founder Jerry Yang. Investors overlooked Yahoo's flagging core business because it gave them a chance to buy into Alibaba. But with the Chinese company now public, Yahoo must stand on its own.

Yahoo on Tuesday said display ad revenue -- an important financial metric for the company -- continued its slip, falling 6 percent from a year ago. Google has an undisputed lead in global digital ad share, with 32.4 percent of the market, according to eMarketer. Facebook comes in at No. 2 with 8 percent, followed by Yahoo with 2.4 percent.

Mayer also faces an attack from activist investor group Starboard Value, a firm that last month said it owns a "significant stake" in Yahoo and wrote an open letter to Mayer urging her to consider a merger with AOL. The group also criticized Mayer's acquisition strategy. The company has bought more than 40 small companies in the last two years, largely in an attempt to cull together mobile engineering talent.

On Tuesday, Mayer is expected to detail her turnaround plan during a conference call with analysts, according to The Wall Street Journal. CNET will be covering the call at 2 p.m. PT, so check back here for updates.

Yahoo is expected to get a more than a $5 billion windfall before taxes from selling off a large portion of its stake in Alibaba in the offering, though Yahoo still retains 16 percent of Alibaba. Mayer will reportedly outline the company's cost-cutting strategy -- the company laid off more than 400 employees in India and Jordan last month. Mayer is also expected to open up about how Yahoo is evaluating acquisition possibilities.

Yahoo made a splash last year when it bought the popular blogging service Tumblr, though the company hasn't yet shared any details about how the site has affected Yahoo's bottom line. Under Mayer's tenure, Yahoo has also refreshed all of its mobile apps, including Weather, Sports and Finance, and introduced Yahoo News digest, a news reader that summarizes articles via algorithm. Still, the company hasn't broken down ad revenue specifically related to mobile.


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