Yahoo shares slip following poor quarterly results

Yahoo suffered a drop in revenue for the fourth straight quarter, prompting shares to fall nearly seven per cent in the search engine firm.

Total revenue fell by $80 million (£49 million) in the fourth quarter, in line with analysts' predictions.

Dwindling ad sales caused by increased competition from rivals like Facebook and Google helped to account for the lack of growth.

Despite this, Yahoo CEO Marissa Mayer saw signs of hope in the results.

"I'm encouraged by Yahoo's performance in Q4 and 2013 overall," Mayer said in a statement. "We saw continued stability in the business, and our investments allowed us to bring beautiful products to our users and establish a strong foundation for revenue growth.

"We are extremely heartened by the year-over-year traffic increase we experienced in 2013, an early sign of return on our investments and the acquisitions we've made."

Yahoo appointed former Google employee Mayer as CEO in 2012 in an attempt to turn round its fortunes.

However, ad sales – the company's main source of revenue - have continued to fall under Mayer's leadership. Recently it was revealed by eMarketer that Yahoo had been surpassed by Facebook as the number two digital advertising seller.

Related: Yahoo chief Marissa Mayer hails 2014 as "tipping point" for tech

Ad sales for Facebook continued to improve in the fourth quarter of 2013, with the social network recently announcing a $2.78 billion (£1.69 billion) increase in revenue last year.

Looking forward, Mayer is hoping for success with recently launched products like Yahoo Mail, Yahoo Finance and a new Flickr service.