(Associated Press via NewsEdge) Yahoo keeps raking in more money as advertisers continue to shift their spending to the Internet, but the Internet powerhouse keeps lagging behind online search leader Google.
And now it looks like Yahoo won't be closing that gap as soon as management had promised, much to the dismay of Wall Street.
An unexpected delay in a much-touted technology for boosting Yahoo's ad revenue overshadowed another solid quarter for the company, triggering a nearly 14% slide in its stock price this week.
"I can sense the frustration of investors," said Piper Jaffray analyst Safa Rashtchy. "It's discouraging and disheartening, especially because Yahoo didn't really give a good reason for the delay."
If not for the backlash, Yahoo might have been in a better position to celebrate its second-quarter results.
The owner of the world's most trafficked Web site said it earned $164.3 million during the three months ended in June. That matched the average estimate among 34 analysts surveyed by Thomson Financial.
The quarterly profit marked a 78% drop from the second quarter of 2005, when Yahoo earned $754.7 million.
The sharp decline is deceiving because Yahoo realized a $552-million windfall in last year's quarter by selling its remaining stake in Google. Revenue for the second quarter totaled $1.58 billion, a 26% improvement from $1.25 billion last year. After subtracting the commissions Yahoo paid to other Web sites in its advertising network, revenue stood at $1.12 billion, up 28% from last year.
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