SAN FRANCISCO — Yahoo remained stuck in a revenue rut during the second quarter, muting the celebration of CEO Marissa Mayer's first year running the Internet company.

The numbers released Tuesday showed Yahoo Inc.'s earnings are still rising, but they also highlighted the challenges facing the company as it loses ground to rivals Google Inc. and Facebook Inc. in the online advertising market that generates most of their revenue.

Yahoo sold slightly fewer display ads than it did at the same time last year, and the prices that marketers were willing to pay for the space fell by 12 percent, too. The Sunnyvale, Calif., company made some small strides in the Internet ad market dominated by Google, but it still wasn't enough to prevent Yahoo's revenue from slipping in a quarter when the digital ad market in the U.S. increase by 15 percent, based on estimates by the research firm eMarketer.

Google's second-quarter earnings, due out Thursday, are expected to show even more robust growth.

Yahoo's nagging ad headaches initially dragged down the company's stock by more than 2 percent in extended trading, but the selling reversed after management assured investors that it intends to keep buying back the company's stock. The commitment comes after Yahoo had already spent $3.6 billion buying back about 190 million of its shares since last year, fulfilling a pledge that Mayer made shortly after the company realized a $7.6 billion windfall from selling nearly half of its stake in Chinese Internet company Alibaba.

The extension of the share repurchases pleased Wall Street because it should help support Yahoo's stock price in the months ahead. Besides helping to fuel demand for the stock, the repurchases help increase earnings per share by reducing the volume of outstanding stock. Yahoo now has 10 percent fewer shares outstanding than a year ago. The company indicated it may spend another $1.9 billion buying back its stock, which would be enough to take about 70 million more shares off the market at current prices.

As of late Tuesday, Yahoo's stock had gained 22 cents to $27.10 in extended trading. The shares have gained more than 70 percent under Mayer's leadership.

In an unusual live video presentation streamed on Yahoo's website, Mayer focused on other things besides finances while reviewing the company's progress since she defected from a top job at Google a year ago to try to rejuvenate one of the Internet's best-known brands.

Mayer said Yahoo's employee attrition rate is down by 59 percent and innovation in mobile is way up, thanks largely to the 17 acquisitions that she has completed, including a $1.1 billion deal for Internet blogging service Tumblr. Traffic to Yahoo's website is also on the upswing for the first time in more than a year, according to Mayer.

"We have created a new, supercharged Yahoo," she boasted during the video presentation.

Mayer, 38, has gotten a big jolt from Alibaba, a rapidly growing company in which Yahoo invested $1 billion eight years ago in exchange for a 40 percent stake.

After selling part of its holdings back to Alibaba last year, Yahoo still owns a 24 percent stake that is expected to bring in another $10 billion to $20 billion during the next few years.

Alibaba is also lifting Yahoo's ongoing earnings, as the second-quarter report illustrated. Yahoo made more money from its investments in Alibaba and Yahoo Japan during the second quarter than it did from its U.S. operations. That's the second straight quarter that has occurred.

Yahoo earned $331 million, or 30 cents per share, in the three months ending in June. That compared with net income of $227 million, or 18 cents per share, at the same time last year.

If not for certain items unrelated to its ongoing business, Yahoo said it would have earned 35 cents per share. That was a nickel above the average estimate among analysts surveyed by FactSet.

Cost cutting helped boost the earnings. The company's payroll stood at 11,500 workers at the end of June, down by 9 percent over the past year.

Revenue for the period declined 7 percent from the same time last year to $1.14 billion.

After stripping out ad commissions, Yahoo's revenue came to $1.07 billion. That was slightly below analyst projections and marked a 1 percent decline from last year. It's the first time that Yahoo's net revenue has fallen since Mayer took over.

Yahoo is bracing for another possible downturn in the current quarter ending in September. The company predicted its revenue, minus ad commission, will range from $1.06 billion to $1.1 billion. The lower end of that forecast is below net revenue of $1.09 billion at the same time last year. Analysts, on average, had projected revenue of $1.12 billion in the current quarter.