Investors dumped shares in Yahoo (YHOO
) on Sept. 19 after the Sunnyvale, Calif.-based Internet company warned of slowing online advertising growth in recent weeks.
Noting weakness in revenue from auto and financial services advertising, Yahoo now expects its third-quarter revenues to be at the bottom half of its previously forecasted range, according to the Reuters report of a Goldman Sachs media conference on Sept. 19. On July 18, Yahoo had forecast third-quarter revenue of $1.12 billion to $1.23 billion excluding traffic acquisition costs, Reuters said.
Yahoo's stock price plunged 12% to $25.51 in Nasdaq trading at around 4:00 p.m. Eastern Daylight Time.
After the news, Standard & Poor's Corp. analyst David Kaplan reiterated his hold rating on Yahoo's stock. But he said in a research note that Yahoo and several other Internet companies, including Google (GOOG
), eBay (EBAY
) and Amazon (AMZN
) are taking hits in the market "on concerns about a possible deceleration in internet advertising and spending." (S&P, like BusinessWeek.com, is owned by The McGraw-Hill Companies.)
Yahoo's rival Google sank in value by 2.9% to $402.84 per share on the The NASDAQ Global Select Market at around 4:00 p.m. Eastern Daylight Time. The online auctioneer eBay dropped 3.2% to $25.98 per share, while the retailer Amazon shed 1.6% to $31.58.