• by Laurie Sullivan  @lauriesullivan, April 19, 2016

Yahoo reported that revenue fell 11% to $1.09 billion for the first quarter in 2016, reminding those that are bidding for the business of the challenges facing them that lie ahead.

Yahoo posted a loss of 10 cents per share in Q1 2016, compared with a year-earlier profit of 2 cents per share.

The search business took a beating, down 15% to $820 million in the first quarter of 2016, compared with the first quarter in 2015. GAAP search revenue was $492 million Q1 2016, down 9% compared with Q1 2015.

Yahoo paid $144 million to search partners during the first quarter of 2016, up 44% compared with Q1 2015.

The number of paid clicks fell 21% in the first quarter of 2016, compared with the year-ago quarter, and the price per click rose 7%, respectively.

eMarketer estimates Yahoo will take 1.6% of the $86.25 billion worldwide search market in 2016, down from  2.2% share in 2015. The data firm ranks Yahoo No. 4 in the search ad market, behind Google, Baidu, and Microsoft.

Mobile and display advertising fared much better than search.

Mobile revenue represented 25% in the first quarter of 2016, up from 21% in the year-ago quarter. Gross mobile revenue for the first quarter of 2015 and 2016 was $391 million and $412 million, respectively.

Display revenue, GAAP, also rose 1% to $463 million for the first quarter of 2016, compared with Q1 in 2015. Revenue paid to display partners rose 1% to $83 million for the first quarter. Overall, the number of ads sold rose 8% in the first quarter, compared with Q1 2015. The cost per ad fell 6% during the same time frame.

Yahoo CEO Marissa Mayer said in a prepared statement that the company made substantial progress toward potential bids for Yahoo, as the company continues to lower costs to drive up revenue.

Yahoo has worked to reduce costs by trimming staff and shuttering products, including seven digital magazines.

eMarketer estimates worldwide digital ad spending will reach $186.81 billion in 2016, up from $1159.33 billion in 2015. The data firm believes Yahoo will take $2.83 billion in digital ad revenue worldwide, or 1.5% of the worldwide digital ad market, down slightly from $3.28 billion or 2.41% share in 2015.