Yahoo's quarterly earnings fell short of expectations, at a time where the company is close to selling its core business. The company reported adjusted earnings of 9 cents per share. It also announced a $482 million write-down on the value of Tumblr, the social media service that it acquired in 2013 for $1.1 billion.

Yahoo is in the process of auctioning off its search and advertising business, and is expected to choose a winner this week. The company said its board has made "great progress on strategic alternatives" but did not comment further on the auction process.

"With the lowest cost structure and headcount in a decade, we continue to make solid progress against our 2016 plan. Through disciplined expense management and focused execution, we delivered Q2 results that met guidance across the board and in some areas exceeded it," said Marissa Mayer, CEO of Yahoo. "In addition to our efforts to improve the operating business, our board has made great progress on strategic alternatives. We are relentlessly focused on delivering shareholder value."

Verizon Communications and AT&T are said to be in the running to acquire the core business, along with private equity firm TPG Capital and a consortium led by Quicken Loans founder Dan Gilbert and backed by billionaire Warren Buffett.

Yahoo posted a net loss of $439.9 million. Although total revenue rose to $1.31 billion from $1.24 billion a year earlier, the seeming improvement was the result of a change in the way the cost of acquiring traffic is counted. After deducting fees paid to partner websites for traffic, revenue fell to $841.2 million from $1.04 billion.

Revenue in the company's emerging businesses, which Chief Executive Officer Marissa Mayer calls Mavens - mobile, video, native and social advertising - showed some life, rising 25.7 percent to $504 million in the second quarter ended June 30.