Yahoo Shares Tumble On Report Of Slower Ad Sales - InformationWeek

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Yahoo Shares Tumble On Report Of Slower Ad Sales

Reports of a weakening in some categories of online advertising caused Yahoo's stock to fall more than 12%.

Yahoo stock tumbled Tuesday after the entertainment portal's executives told an investors conference that they saw a weakening in some categories of online advertising.

In mid-afternoon trading on the Nasdaq stock exchange, Yahoo shares had fallen more than 12 percent to about $25. The sell off followed comments from Yahoo executives that advertising sales to automotive and financial services companies had slowed.

"They're still growing, but they're not growing as quickly as we might have hoped at this point in time," Yahoo Chief Executive Terry Semel told investors at a Goldman Sachs conference, according to a report on the Wall Street Journal Online.

Susan Decker, chief financial services officer for Yahoo, said the slowdown was having an impact on the company's quarter, and would likely lead to the portal reporting "in the bottom half of the range" of its third-quarter estimate, according to the Journal.

Online advertising has been the engine for revenue growth among most Internet companies. In the first quarter of the year, online ad revenue rose 38 percent to $3.9 billion, according to the Interactive Advertising Bureau. In 2005, revenues swelled 30 percent over the previous year to $12.5 billion.

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