Yahoo's Second-Quarter Earnings in Three Charts

Portal Posts Sixth Straight Quarter of Declining Revenue

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Reputation-wise, Yahoo has come a long way since Marissa Mayer took over as CEO in July 2012. Revenue-wise, not so much.

Heading into the second quarter of 2014, Yahoo's overall revenue had experienced five straight periods of year-over-year decline. And Yahoo's display advertising business had gone six straight quarters without achieving year-over-year growth.

The story stayed the same in the latest quarterly results, which came out today, extending those streaks for another three-month period.

Yahoo's total revenue shrunk by 4% from the quarter a year earlier, to $1.08 billion, in line with analysts' estimates.

Revenue from display advertising totaled $436 million, down 8% from the equivalent quarter last year.

And revenue from search advertising -- an earnings bright spot last quarter -- rose by 2% to $428 million.

Here's what Yahoo's revenue mix has looked like in each quarter since Ms. Mayer's appointment.

Over the past year, Yahoo's advertising revenue has been driven by the portal selling more and more ads that cost less and less. Yahoo has begun to reverse that trend with its search business, which is growing faster than its larger display business.

Yahoo's display advertising business struggles are largely the portal's own doing. A year after introducing its so-called native Stream Ads, which appear within content feeds, Yahoo CFO Ken Goldman said during Tuesday's earnings call that those units accounted for 40% of the ads Yahoo ran in the second quarter.

Yahoo seems to have rolled out an ad product advertisers like. That's a good thing. But advertisers like it so much that they're buying the cheaper Stream Ads at the expense of Yahoo's higher-priced premium units like home-page takeovers and splashy log-out page banners.

Ms. Mayer acknowledged the "lower than expected contribution from premium advertising," which has become a trend now spanning three straight quarters. That reduced premium demand is in spite of Ms. Mayer personally meeting with 500 advertisers and agency execs who collectively represent more than 350 brands throughout the second quarter.

Yahoo's premium ad sales may also have been partially hampered by the delayed roll-out of Yahoo Ad Manager Plus, an automated ad-buying tool for big-budget advertisers that was announced in January. Ms. Mayer said the product's delay contributed to the display revenue shortfall but said its roll-out is expected to be completed in North America in the first half of the third quarter.

The portal has seen its share of the U.S. display ad market dwindle over the past four years. In 2010 it held the dominant position, according to eMarketer. A year later it ceded that position to Google and Facebook. Now the research firm projects that Microsoft will overtake Yahoo's share of global digital ad revenue by the end of this year.

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