SAN FRANCISCO — Yahoo Inc.'s first-quarter earnings report was seen by some as an early test of Marissa Mayer's ability to turn around the troubled Internet company.
Investors now seem to be worried Mayer might not pass that test.
Shares that have surged more than 50% since Mayer took over Yahoo in July plunged more than 4% to $22.78 in extended trading Tuesday after the company reported that its display advertising business had suffered declining revenue for the second straight quarter. Revenue from display ads fell 11%, excluding certain items. Search advertising rose 6% year over year.
Yahoo said it earned $390 million, or 35 cents a share, in the first three months of the year, compared with $286 million, or 23 cents, in the first quarter of 2012.
Net revenue, which does not include fees to partner websites, was $1.07 billion in the quarter, essentially flat from the year-ago period.