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Yahoo's Mayer: We know what the 'top priority' is

Yahoo announced earnings and revenue Tuesday that slightly topped analyst estimates, but its CEO said she is doing everything she can to facilitate a beneficial corporate sale — acknowledging it's shareholders' "top priority."

The struggling internet giant posted adjusted first-quarter earnings per share of 8 cents, compared to 15 cents per share in the year-earlier period. Gross revenue for the quarter also fell year-over-year, coming in at $1.09 billion, against the comparable year-ago figure of $1.23 billion.

Those results were slightly less bad than Wall Street had estimated: Analysts expected Yahoo to report earnings of about 7 cents per share on about $1.08 billion in revenue, according to a consensus estimate from Thomson Reuters.

Yahoo shares traded about 1 percent higher in after-hours trading following the results announcement.

CEO Marissa Mayer characterized the quarterly results as "in line" with expectations, and said her team's 2016 plan "is off to a solid start as we continue to focus on driving efficiency, lowering costs, and improving long-term growth."

But more importantly for many investors, Mayer acknowledged that the company has made "substantial progress towards potential strategic alternatives for Yahoo."

Yahoo has been under pressure for years to bolster its flagging core business — which include its search and content operations — and that has proven a difficult task for Mayer. In fact, Yahoo's board took bids on the sale of its core assets in recent days.

"Our board, our management team, and I are completely aligned on this top priority for shareholders," Mayer said of the pursuit of a potential sale.

Re/code reported earlier Tuesday that bidders included Verizon — whose interest had long been telegraphed — private equity firm TPG, and a joint offer from Bain Capital and Vista Equity Partners.

According to The Wall Street Journal, most of the bids came in the range of between $4 billion and $8 billion.

On the "strategic alternatives" front, Yahoo said that its board has "formed a strategic review committee of independent directors to consider strategic alternatives for the company alongside its continued consideration of a reverse spin."

"Since the launch of the process in February, management has worked diligently with the committee and its independent legal and financial advisors to engage with interested strategic and financial parties," Yahoo said in its Tuesday release.

In December, the company shelved its planned spin-off of its stake in Chinese e-commerce giant Alibaba. Yahoo then said in February that it would consider a "reverse spin," wherein it would effectively separate its core assets from its Alibaba holdings.

The strategic review committee is "leading a well-run process to achieve the best possible outcome for our shareholders," Mayer said on Yahoo's earnings webcast, adding that her team is "moving expeditiously." In fact, she said, Yahoo management participates in daily calls and meetings with the committee.

"I personally believe that the right transaction could unlock tremendous value," the CEO added, explaining that strategic synergies and the separation of equity stakes (like that in Alibaba) from business operations could help shareholders.

Mayer also explained that her team has sought to run a "high-quality process designed to keep interested parties engaged," and that has included assembling data and compiling a management presentation.

"Our efforts to date reflect clear, decisive action to move forward quickly and in a way that we believe will yield enhanced value," she said, potentially responding to some complaints that her team may be dragged its feet on pursuing a sale.

She hinted that interested parties have included "some of the most well-known, respected names in the industry."

Concluding her statement on the strategic review, Mayer said the company does not intend to provide further comments or updates on specific details "to preserve the value and integrity of the process."

As part of her plan to build Yahoo's future, Mayer has pushed growth in "Mavens" — a term that stands for mobile, video, native and social operations. But mobile revenue has been relatively slow to expand, with even struggling Twitter exhibiting more growth.

In fact, Yahoo's reported mobile revenue actually fell from the fourth quarter 2015 to Q1 of this year — from $291 million to $260 million.

Overall, Mavens revenue only increased slightly year-over-year to $390 million in the first quarter from $365 million in the comparable year ago period. So-called "non-mavens" revenue fell from $742 million to $644 million year-over-year.

On the other revenue fronts, Yahoo reported that its GAAP search revenue was $492 million — a 9 percent decrease compared to the same period in 2015. GAAP display revenue, meanwhile, came in at $463 million for the quarter, representing a 1 percent decrease year-over-year.

"You have to remember that two years ago for this Q1 period Yahoo did 38 cents a share in EPS, last year they did 15 cents a share, this year they're proud to announce that they did 8 cents a share," Eric Jackson, whose firm SpringOwl Asset Management is a Yahoo investor, told CNBC. "Sometimes we get too caught up in the minutia of the short term: This is a company that has really been put into a nosedive by its CEO, and a lot of these problems are of their own making."

Looking ahead to the second quarter report, Yahoo said it expects to see GAAP revenue between $1.05 billion and $1.09 billion. Wall Street had on average estimated $1.1 billion for the ongoing quarter, according to StreetAccount.

Yahoo shares have fallen by about 18 percent over the last year — compared to the Nasdaq's roughly flat performance over that period.

Also on the horizon for Yahoo is a looming proxy fight with activist firm Starboard Value.

Speaking with CNBC Tuesday morning, Starboard Value CEO Jeff Smith said his bid to replace the Yahoo board is part of a plan to potentially pick up the pieces of a broken company if a sale doesn't go through.

"We need to protect ourselves because if we get to the annual meeting and the company has not moved forward as they're supposed to — there's a question here as it relates to capability and credibility of the board members and management team in terms of running the process," Smith said.

"If we get to the end, and they haven't been successful as it relates to getting the company sold — the core business sold — well we're going to need to pick up the pieces," he added.

In 2014, Starboard issued a letter to Mayer encouraging her to explore a strategic combination with AOL. Verizon is AOL's new parent.