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Early signs positive for Mayer's Yahoo leadership

Yahoo has reported strong quarterly and yearly revenue growth, but fourth-quarter earnings fell nearly 8 per cent as a result of a one-time charge related to the company shutting down its South Korean business.

In her first full quarter at the helm of Yahoo, CEO Marissa Mayer guided the company to steady improvement on the sales side. Fourth quarter revenue of $1.35 billion (£859 million) was up two per cent from the same period in 2011, while Mayer noted that full-year sales of $4.99 billion (£3.17 billion) in 2012 marked a major turnaround for the struggling company.

"I'm proud of Yahoo's 2012 and fourth-quarter results. In 2012, Yahoo exhibited revenue growth for the first time in four years, with revenue up 2 per cent year-over-year," Mayer said in a statement.

"During the quarter we made progress by growing our executive team, signing key partnerships including those with NBC Sports and CBS Television, and launching terrific mobile experiences for Yahoo Mail and Flickr," she said. "At the same time, we achieved tremendous internal transformation in the culture, energy, and execution of the company."

Yahoo's fourth-quarter profits came in at $272 million (£173 million), well below the profits enjoyed in the 2011 quarter, but the more recent figures were affected by the nearly $100 million (£64 million) in charges the company took for shutting down its Korean business.

For the full year, Yahoo reported net earnings of $3.95 billion (£2.5 billion), well above the $1.05 billion (£669 million) of 2011, though that included a net gain of $2.76 billion (£1.7 billion) related to the sale of Alibaba shares, the company said. A more useful picture was provided by Yahoo's non-GAAP earnings figures - for 2012, the company said its non-GAAP net earnings were $1.41 billion (£898 million), up 35 per cent from 2011.

Mayer, formerly a top executive at Google, was named Yahoo CEO in July. She took over a company that had suffered through a particularly rough patch of leadership, which included the firing of Carol Bartz and the revelation that Scott Thompson had inflated portions of his resume.

Yahoo's third quarter, its first under Mayer, was solid but unspectacular, with sales flat against the same period in 2011. The new CEO's biggest visible impact in the early stages of her tenure was the introduction of some Google-like management practices, including the provision of free food for staffers.

Within a few months, however, Mayer was making even bigger changes. Yahoo's new boss reportedly took a hatchet to the company's existing compensation and time off arrangements, including the implementation of a new performance evaluation regime that could see a fifth of the company's roughly 12,000 employees get pay cuts or pink slips.

Meanwhile, Yahoo may be experiencing a shift in how it goes about its business - the company's display ad revenue fell 3.5 per cent in the fourth quarter while search ad sales grew by 3.8 per cent.

Mayer recently discussed Yahoo's future in a Bloomberg interview and said the company was particularly focused on its mobile strategy.