Yahoo profits plunge adds to post-Alibaba worries

Investors are anxious to see what Yahoo will do now that it has spun off its stake in Alibaba

Internet search giant Yahoo has reported worse-than-expected profits for the first three months of this year, adding to investor concern.

The company said it earned $21m (£14m) in the first quarter, compared with $312m a year earlier.

Although revenue from the company's mobile offerings increased by 61%, overall revenue from operations was $1.04bn, below expectations.

Shares in the firm fell nearly 2% in trading after markets closed.

"Yahoo is amidst a multi-year transformation to return an iconic company to greatness," said chief executive Marissa Mayer in a statement accompanying the earnings.

Investors are concerned about how the company will continue to generate revenue once it spins off its 15% stake in Chinese e-commerce giant Alibaba.

Ms Mayer highlighted a re-negotiated contract with Microsoft as a potential area of new growth.

She also said the company's partnership with search engine Mozilla had led to increased search traffic.