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Yahoo's Q4 shows modest strides

Associated Press logo Associated Press 24/01/2017

Yahoo's financial performance has improved slightly in the fourth quarter while the company dealt with the fallout from massive security breaches that have jeopardised the $US4.8 billion ($A6.3 billion) sale of its internet operations to Verizon Communications.

The fourth-quarter report released on Monday provided the latest snapshot of a shrinking company that has been steadily losing ground in the digital advertising market that generates most of its revenue.

The Sunnyvale, California, company earned $US162 million during the final three months of 2016.

The HQ of Yahoo in the US. © Provided by AP The HQ of Yahoo in the US.

That compared with a loss of $US4.43 billion, which that included charges for layoffs and the decaying value of Yahoo's past acquisitions.

Yahoo's fourth-quarter revenue totalled $US1.47 billion.

After subtracting commissions paid to advertising partners, Yahoo's revenue stood at $US960 million, down from $US1 billion in the previous year.

For all 2016, Yahoo's revenue declined 14 per cent to $US3.52 billion after deducting ad commissions.

It marked Yahoo's lowest annual net revenue since 2004.

Yahoo also disclosed the closure of the Verizon deal will be delayed for up to three months.

Although cost-cutting helped Yahoo bounce back from a loss during the same time in the previous year, the company's net revenue slipped yet again to extend a downturn that has lasted through most of chief executive Marissa Mayer's four-and-a-half-year tenure

In a sign of modest progress, Yahoo's revenue fell four per cent after subtracting ad commissions, snapping a streak of four consecutive quarters of double-digit declines.

Yahoo's long-running slump culminated in the company's agreement in mid-2016 to sell its email service, websites and mobile applications to Verizon.

But after striking the Verizon deal, Yahoo revealed it had been hit by two separate hacking attacks that stole the email addresses, birth dates, answers to security questions, and other personal information from more than one billion user accounts.

The break-ins occurred in 2013 and 2014, raising further questions about Yahoo's security controls and the timing of its disclosures.

The Securities and Exchange Commission has opened an investigation into whether Yahoo should have announced the security breaches sooner than it did.

Verizon has been doing its own review to determine whether it should renegotiate the sales price or cancel the deal entirely.

Mayer said user engagement has remained stable without providing specific numbers in a statement accompanying the fourth-quarter results.

Even so, wrapping things up with Verizon is going to take longer than Yahoo had hoped.

Instead of closing the deal by the end of March as originally planned, Yahoo predicted it would now be completed between April 1 and June 30.

"The opportunities ahead with Verizon look bright," Mayer said.

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