Yahoo’s share price has risen 9% despite a 1% decline in revenue to $1.13bn and a 17% decline in earnings per share for the first quarter of 2014 compared with the first quarter a year ago.
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Chief executive Marissa Mayer put a positive spin on the results, highlighting that revenue excluding traffic acquisition costs (ex-TAC) was $1,087m, a 1% increase compared with 2013.
"I am really pleased by our first quarter performance, marking our best Q1 revenue ex-TAC since 2010,” she said.
Mayer said the results were buoyed by Yahoo’s ninth consecutive quarter of year-over-year growth in search revenue ex-TAC and its first quarter of year-over-year growth in display revenue ex-TAC since 2011.
“The first quarter was an early and important sign of growth in our core business," she said.
Some commentators said the “solid” earnings report has bought Mayer more time to carry out her turnaround plan.
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In the almost two years since Mayer was charged with turning around Yahoo’s fortunes, she has invested in Yahoo’s mobile capabilities.
She highlighted the success of this strategy, saying: “We're delighted to now see more than 430 million monthly mobile users accessing Yahoo's new products."
In other commentary on the results, Mayer said mobile is possibly the most important of the four businesses that are key to Yahoo’s growth. The others being advertising, social and video.
Mayer appears to have won investor confidence with the company’s first quarter profits of $312m beating expectations, despite being 20% below profits in the first quarter of 2013.
I am really pleased by our first quarter performance, marking our best Q1 revenue ex-TAC since 2010
Marissa Mayer, Yahoo
Yahoo said revenue from display advertising increased by 2% to $409m (ex-TAC) while search revenue increased 9% to $444m (ex-TAC) compared with the same period a year ago.
In contrast, Chinese internet giant Alibaba, of which Yahoo owns a 24% stake, has reported surging revenues of $3.06bn in the fourth quarter of 2013, an increase of 66% on the same period in 2012.
Alibaba's fourth quarter earnings were released as part of Yahoo's report and also showed profits for the Chinese firm increased 110% to $1.4bn compared with the fourth quarter of 2012.
Alibaba is expected to complete a public share sale his summer on a US exchange, according to the BBC.
The share float could raise as much as $15bn, making it the biggest technology company debut since Facebook's stock sale in 2012.