Still dismal for Marissa Mayer as despite her best efforts Yahoo! continues to slide

“Our top priority is revenue growth, and by that measure, we are not satisfied with our Q2 results. While several areas showed strength, their growth was offset by declines.”

Yahoo’s fortunes are still very much tied to its stake in Alibaba, the private Chinese Internet company expected to go public next month, said the New York Times.

On Tuesday, when Yahoo announced its second-quarter earnings, it said it had reached an agreement with Alibaba to reduce the number of shares it is required to sell in the initial public offering, to 140 million shares from 208 million shares.

Conservative estimates predict Alibaba will be valued at $150bn when it goes public, more than five times Yahoo’s current $35bn market valuation,

And, amid the gloom, more good news for shareholders: Kenneth Goldman, Yahoo’s chief financial officer, told investors that Yahoo planned to return at least half of its after-tax profits from the Alibaba offering to shareholders.

Other than that, however Mayer's best efforts to drive revenue through new products and acquisitions have done little to bolster the company’s financial performance.

“Things aren’t getting better,” Colin Gillis, an analyst at BGC Partners, declared. “The core business is still dismal.

Yahoo’s revenue from its display advertising business fell 8 percent last quarter, to $436m, compared with the same quarter a year ago, largely because Google and Facebook are winning bigger shares of the U.S. display ad market.

Yahoo, once the top seller of display ads in America, is projected to drop to 6 per cent market share, from 7.1 per cent market share last year, according to eMarketer.

On Tuesday, Yahoo said its income from operations slid 72 per cent, to $38m, from the year-ago quarter, much of that because of a restructuring charge. Net earnings for the second quarter were down 19 per cent, to $270m, or 26 cents a share, from $331m or 30 cents a share.

The biggest black hole, said the New York Times may well be Yahoo’s revenue from mobile advertising, considered the hottest growth area for Internet companies.

Yahoo did not report its mobile ad revenue on Tuesday, even though the market for mobile advertising is expected to reach $17.73bn this year, an 83 per cent jump from last year, according to eMarketer.

Shares of Yahoo fell 2 percent in after-hours trading, down 9 cents, or 0.25 percent, to $35.61.