Yahoo sees modest improvements

Yahoo has seen a slight increase in revenue for the current year as it revamps its family of websites, but chief executive Marissa Mayer warned it would be a long time before the outfit is in the clear.

Mayer has been running what she calls a plan to create a “chain reaction of growth” by overhauling a dozen of its online services to increase the amount of time users spent on its websites.

Yahoo has seen an increase in search advertising and progress in improving its internal operations. Shares were three percent higher in after hours trade after the revenue projection was disclosed during an analyst conference call.

Where Yahoo is weak is in its display ad business, which accounts for roughly 40 percent of the company’s total revenue.

Mayer warned that while the road to growth was certain, it will not be immediate.

According to Reuters, Yahoo revenue will range between $4.5 billion and $4.6 billion in 2013. This is an annual growth rate of 0.7 percent to thee percent.

Finance chief Ken Goldman also warned investors that Yahoo would have to spend some money in the first half of the year, which he said would impact profit margins.

During the fourth quarter, Yahoo’s net revenue increased four percent to $1.22 billion, as search advertising sales offset a 10 percent decline in the number of display ads sold.

Mayer said the decline was the result of less activity by visitors to its popular websites, such as its web email service.

Some users had disappeared into their smartphones, where Yahoo’s ad business is not as strong, Mayer added.

The company has been trying to improve its mobile properties, beginning last year with a redesign of the photo-sharing service Flickr. Mayer claimed Yahoo now has 200 million monthly mobile users.

Yahoo’s stock has risen roughly 30 percent since Mayer took the helm, reaching its highest levels since 2008. Part of this has come from stock buybacks, using proceeds from a $7.6 billion deal to sell half of its 40 percent stake in Chinese web company Alibaba Group.

Yahoo said it repurchased $1.5 billion worth of shares during the fourth quarter.

The company’s fourth-quarter net income was $272.3 million versus $295.6 million last year. Still those figures were better than the cocaine nose jobs of Wall Street had predicted.