The company said it would simplify its product portfolio and that it had begun to explore divesting non-strategic assets.
Yahoo on Tuesday also reported a 15 percent fall in adjusted quarterly revenue as it struggles to keep its share of online search and display advertising in the face of tough competition from Facebook Inc and Alphabet Inc's Google.
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Marissa Mayer, former Yahoo CEO
Yahoo to explore strategic alternatives alongside spin-off
Marissa Mayer, president and chief executive officer of Yahoo! Inc., speaks during the 2015 Fortune Global Forum in San Francisco, California, U.S., on Tuesday, Nov. 3, 2015. The forum gathers Global 500 CEO's and innovators, builders, and technologists from some of the most dynamic, emerging companies all over the world to facilitate relationship building at the highest levels. Photographer: David Paul Morris/Bloomberg via Getty Images
Marissa Mayer, president and chief executive officer at Yahoo! Inc., smiles during the 2015 Bloomberg Technology Conference in San Francisco, California, U.S., on Tuesday, June 16, 2015. Mayer said that the company's spinoff of its stake in Alibaba Group Holding Ltd. is proceeding as planned. Photographer: David Paul Morris/Bloomberg via Getty Images
NEW YORK, NY - MAY 04: Marissa Mayer, President and CEO of Yahoo attends 'China: Through The Looking Glass' Costume Institute Benefit Gala - Press Preview at Metropolitan Museum of Art on May 4, 2015 in New York City. (Photo by Bennett Raglin/WireImage)
NEW YORK, NY - APRIL 27: Yahoo CEO Marissa Mayer attends the 2015 Yahoo Digital Content NewFronts at Avery Fisher Hall on April 27, 2015 in New York City. (Photo by Cindy Ord/Getty Images for Yahoo)
Marissa Mayer, president and chief executive officer at Yahoo! Inc., smiles during a press conference at the Yahoo! Inc. Mobile Developer Conference in San Francisco, California, U.S., on Thursday, Feb. 19, 2015. Mayer unveiled a suite of development tools for mobile applications that integrate its own advertising services with features it acquired with analytics startup Flurry Inc. Photographer: David Paul Morris/Bloomberg via Getty Images
Marissa Mayer, chief executive officer of Yahoo! Inc., listens during a panel session on day four of the World Economic Forum (WEF) in Davos, Switzerland, on Saturday, Jan. 25, 2014. World leaders, influential executives, bankers and policy makers attend the 44th annual meeting of the World Economic Forum in Davos, the five day event runs from Jan. 22-25. Photographer: Jason Alden/Bloomberg via Getty Images
Yahoo CEO Marissa Mayer speaks during her keynote address at the 2014 International CES in Las Vegas, Nevada, January 7, 2014. AFP PHOTO / ROBYN BECK (Photo credit should read ROBYN BECK/AFP/Getty Images)
Marissa Mayer, president and chief executive officer of Yahoo! Inc., reacts during the DreamForce Conference in San Francisco, California, U.S., on Tuesday, Nov. 19, 2013. Yahoo boosted its stock-buyback plan by $5 billion, returning more cash to shareholders as Mayer seeks to revive growth at the largest U.S. Internet portal. Photographer: David Paul Morris/Bloomberg via Getty Images
Marissa Mayer, chief executive officer of Yahoo! Inc., smiles at the TechCrunch Disrupt SF 2013 conference in San Francisco, California, U.S., on Wednesday, Sept. 11, 2013. Yahoo! Mayer said the Web portal has surpassed 800 million active monthly users, a 20 percent increase since she joined the company in July 2012. Photographer: David Paul Morris/Bloomberg via Getty Images
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Chief Executive Marissa Mayer, who joined Yahoo in 2012 from Google, has been trying to revive the Internet pioneer's core media and online advertising business by spending heavily to draw more users to its websites.
Mayer proposed in December that Yahoo spin off its main business, which includes its search engine, digital advertising units and its email service, after Yahoo abandoned efforts to sell its stake in Chinese e-commerce giant Alibaba Group Holding Ltd. But the company had provided few details.
Traffic acquisition costs (TAC), the amount Yahoo spends to attract users to its websites, rose to $271 million in the fourth quarter ended Dec. 31, from $74 million a year earlier.
Yahoo's revenue - after deducting fees paid to partner websites - fell to $1.00 billion from $1.18 billion.
The company reported a loss of $4.43 billion, or $4.70 per share, in the quarter, compared with a net income of $166.3 million, or 17 cents per share, a year earlier.
Excluding items, Yahoo earned 13 cents per share, in line with analysts' average expectations.
Up to Tuesday's close of $29.06, Yahoo's shares had fallen 35 percent in the past 12 months. (Reporting by Abhirup Roy and Anya George Tharakan in Bengaluru and Deborah M. Todd in San Francisco; Editing by Savio D'Souza)