(Associated Press via NewsEdge) Yahoo's recently resurgent stock retreated by more than 5% amid fears that a setback in a lucrative partnership with AT&T will undercut the anticipated gains from an overhaul of the Web portal's advertising platform.
The sell-off was triggered by an unconfirmed report in The Wall Street Journal that AT&T wants to stop giving Yahoo a slice of the subscriber fees from a 6-year-old co-branding agreement to sell Internet access in most of the country.
If AT&T gets its way, Yahoo would have to be satisfied with whatever money it could make by selling its own online products, such as digital music or matchmaking services, to subscribers of the joint service.
AT&T declined to comment on the substance of the report, but acknowledged in a statement that its Yahoo partnership 'is rooted in the open and ongoing dialogue we maintain.'
A Yahoo statement included that same language and dismissed The Wall Street Journal report as 'based on rumor and speculation.' It added, however, that the companies were discussing ways to expand their partnership to include AT&T-owned Cingular Wireless.
Investors drew their own negative conclusions. Yahoo shares fell $1.59, or 5.2%, to close at $29.12 on the Nasdaq Stock Market.
Before the downturn, Yahoo's stock had climbed by 20% this year, rebounding from a horrible 2006 performance. That reflected Wall Street's widespread belief that Yahoo will prosper from a month-old upgrade to its formula for linking ads to search requests.
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