But in contrast to the strong growth in what Mayer said called "the future of Yahoo" – a.k.a Mavens – non-Mavens revenue, including desktop display and search, declined about 2% to $725 million.
Within that, though, display did better than it has in the past.
“Overall we’ve been really happy with display," Mayer said. Display advertising increased both year over year and from the previous quarter, to $407 million. "We talked about 2015 being the year display will return to growth," Mayer said. "Now it's happening."
Yahoo also increased ads sold by 9% and cost per ad by 10%, unlike last quarter when it sold more ads at lower CPMs.
Mayer gave a few reasons for those increases, including the fact that pricing for native ads is going in the right direction. Another was "improved sales execution" by Yahoo's salesforce, leading to more premium campaigns entering the system. Finally, Yahoo may be getting better at managing programmatic yield through what Mayer called "filler campaigns."
Mayer also described how Yahoo sets up its waterfall. Premium campaigns are filled first, followed by those coming through its DSP, Yahoo Ad Manager Plus. Finally, campaigns go to the Yahoo Ad Exchange, where third-party exchanges plug in to access supply.
"For users who are not identified, or an impression that doesn’t get sold, they move into a system of filler inventory," Mayer said. "We run our own Yahoo Ad Exchange for that, and we still do, but we’ve begun taking bids from third party exchanges to ensure we get the optimal price for that impression."
The catch: Yahoo has long allowed third parties to bid on its inventory. The big difference is that when it shut down the Right Media Exchange and relaunched the Yahoo Ad Exchange earlier this year, it kicked out (almost) all the properties that weren't owned and operated by Yahoo. Those outside properties were generally considered junky at best.
Could a cleaner, well-lit exchange be driving up programmatic pricing?
Mayer wasn't asked that question, but she did answer another, assuring an investor that programmatic pricing wouldn't rise too much. "We do want to keep an eye on the ROI for advertisers," Mayer said, because "that’s one thing that attracts advertisers to programmatic."
But Mavens aside, Yahoo's plate is full. Numerous investors asked what Yahoo would do if its spinoff company – designed to make its Alibaba windfall tax-free – doesn't get tax-free status., while others were concerned about the lower margins Yahoo is getting as it expands its search business through deals like the one with Mozilla.
Despite the positive revenue growth year over year, that unease sent Yahoo's stock down 2% (as of this writing) in after-hours trading.
Read the full earnings release here.