"It was an active and solid quarter with some nice achievements," said Mayer, who came to Yahoo in July after a sterling career as a top Google executive.

Revenue was US$1.2 billion in the quarter ended Sept. 30, 2012, down 1 percent year on year. Subtracting commissions paid to advertising partners, revenue was about $1.08 billion, matching the consensus expectation from analysts polled by Thomson Financial.

Net income ballooned to $3.16 billion, or $2.64 per share, after a net gain of $2.8 billion related to the company's sale of part of its stake in Alibaba Group back to the Chinese company. That compares to net income of $293.3 million, or $0.23 per share, in 2011's third quarter.

Excluding the Alibaba shares transaction, Yahoo still increased its earnings to $0.35 per share and topped analysts' consensus expectations of $0.26 per share.

She said the company is encouraged by what it considers a "stabilization" of display and search ad revenue, but warned that it will take "multiple years" for Yahoo's revenue to exceed the growth rate of all the markets in operates in, which is her goal.