Yahoo Q3 revenue near-flat as display ad sales slip YAHOO chief executive Marissa Mayer turned in another quarter without meaningful growth, despite bringing on a host of new companies through acquisitions. The Internet company reported third-quarter revenue fell 0.8 per cent to $US1.08 billion, excluding traffic acquisition costs. Display-ad revenue, which comprises about 40 per cent of the company's sales, slipped 6.7 per cent, excluding payments made to drive traffic. Yahoo's performance pales behind the surge in overall digital ad spending this year. The Internet Advertising Bureau estimated the industry grew 18 per cent in the first six months of the year, demonstrating marketers' willingness to shift their spending from traditional media outlets. The company's net income of $US296.7 million, or 28 cents a share, was down 91 per cent from the year-earlier level of $US3.16 billion, or $US2.64 a share, which was boosted by a $US2.8 billion gain related to the sale of some of its stake in Chinese e-commerce firm Alibaba. Excluding special items, per-share earnings slipped to 34 cents from 39 cents. Analysts polled by Thomson Reuters had projected a per-share profit of 33 cents and revenue of $US1.08 billion. Yahoo's roughly 24 per cent stake in Alibaba has become a particular fascination for observers, and no wonder: it accounts for about half of Yahoo's market valuation. Yahoo said Tuesday it has entered into an agreement to reduce the maximum number of Alibaba shares that it is required to sell in connection with Alibaba's initial public offering to 208 million shares from 261.5 million shares. Separately, Yahoo also lowered its revenue and profitability outlook for 2013. The Internet company said in slides on its website that it now expects revenue--excluding traffic-acquisition costs--between $US4.4 billion and $US4.45 billion, down from its previous view of $US4.45 billion and $US4.55 billion. It also projects operating income, excluding certain items, of up to $US860 million, below its previous estimate for between $US900 million and $US1 billion. Ms Mayer has overseen a torrid pace of acquisitions, including blog site Tumblr, Xobni, Rockmelt and Summly. That's helped bring in new developer talent as she shifts the company's historical focus on the desktop computer to smartphones and tablets. Yahoo's emphasis on mobile has led to redesigns of many of its services, such as mobile apps and the company is rolling out more personalisation features that will help it compete with Google. Shares of Yahoo were volatile in after-hours trading. Recently, they slid 15 cents to $US33.23. Through the close, the stock is up 68 per cent since the start of the year.