NEW YORK (

TheStreet

) -- As

Yahoo!

(YHOO)

gears up to release first-quarter earnings Tuesday after the bell, the big question will be how it plans to boost its search business, which has failed to wrestle share from rival

Google

(GOOG) - Get Report

, despite a partnership with

Microsoft

(MSFT) - Get Report

.

Yahoo!'s share of the U.S. online search market shrank last month, according to comScore, falling to 15.7% from 16.1% as its search engine shift to Bing continues to take longer than anticipated.

Under the terms of the deal, Microsoft receives $12 of every $100 in ad revenue generated from clicks alongside ads next to search results.

Yahoo! CEO Carol Bartz

In January CEO Carol Bartz said the Microsoft deal had seen "more bumps than expected," and the company isn't likely to see benefits from the partnership until the second half of this year.

Investors will also be listening for any clues as to the fate of Yahoo's Asian assets, which the firm is under pressure to monetize. The company owns a 40% stake in Chinese e-commerce giant

Alibaba

as well as a 35% chunk of

Yahoo! Japan

.

Reports swirled last month that Yahoo! was in discussions with

Softbank

for its Japan stake, worth about $7 billion, but a deal has yet to emerge.

Selling even part of Yahoo's Asian assets would generate billions of dollars that could be used to finance the acquisition of a buzzy Internet start-up -- a move that Yahoo! desperately needs to prove its commitment to innovation, say analysts.

While rival Google has aggressively acquired companies -- more than 48in 2010 -- Yahoo! has struggled to pursue up-and-coming start-ups. Thecompany has only made several buys in the last few years, and

rumored deals with Groupon

and

Foursquare

last year fell through.

But while Yahoo! has publicly said it is gearing up for a big year of acquisitions, the company has lost two execs tasked with M&A in the last year.

The fate of Bartz, meanwhile, remains up in the air as investors wait for a sign that her turnaround efforts have worked. Hired two years ago to restructure Yahoo! after several years of sluggish growth, Bartz has focused primarily on cutting costs through layoffs and the shutting down of non-core businesses like search site AltaVista.

Still, Bartz has failed to revitalize Yahoo! -- its stock has declined more than 12% in the last 12 months.

While Bartz enters the third year of her contract "the company is still very much in the process of turning itself around," BGC Partners analyst Colin Gillis wrote in a recent research note.

Yahoo's Bread and Butter

Investors will also be closely watching Yahoo!'s core display advertising business, which is expected to grow even as it faces mounting competition from Google and

Facebook.

The company should see display growth of around 13% over last year, in-line with industry expectations, according to Hudson Research analyst Rory Maher.

Analysts expect the Sunnyvale, Calif.-based company to post adjusted earnings of 16 cents per share on revenue of $1.06 billion, down from adjusted earnings of 22 cents per share on sales of $1.13 billion during the same period last year.

Shares of Yahoo! were down 9 cents Tuesday to $16.25.

--Written by Olivia Oran in New York.

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