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Last Updated: Wednesday, 19 July 2006, 00:02 GMT 01:02 UK
Yahoo shares slip on glum outlook
Yahoo search page
Yahoo's shares have fallen by 18% this year
Search engine Yahoo has warned of lower growth in 2006 and postponed a new advertising system, sending shares tumbling 13% in after-hours trading.

The firm said it would delay upgrading its web search advertising system from the third to the fourth quarter.

The news came as the world's biggest internet media firm saw earnings fall, though they met expectations.

Yahoo's net income was $164m (89m) in the second quarter, about 78% lower than the $754.7m seen a year earlier.

However, the 2005 figure had been flattered by a $552m one-off gain earned when Yahoo sold its remaining shares in rival Google last year.

California-based Yahoo had bought the shares as an early investment in Google.


The firm has seen its stock fall since the start of the year amid increasingly stiff competition from Google.

In May, Yahoo announced it would launch its improved web search advertising system.

The new software system is intended to enable advertisers to target potential customers with more precision, based upon the words users type into the search box.

The latest results saw Yahoo's net revenues rise by 28% to $1.12bn, slightly below analyst expectations.

The firm is predicting third-quarter revenues, excluding the cost of obtaining traffic, to reach $1.12bn to $1.23bn.

This is below the $1.15bn to $1.24 range some analysts have been forecasting.

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