Yahoo failed to meet Wall Street's revenue expectation in the third quarter, during which the company saw weaker-than-expected online sales in some industry segments.
Revenue for the quarter, which ended Sept. 30, came in at US$1.58 billion, up 19 percent from last year's third quarter. Excluding the commissions Yahoo pays to Web sites that carry ads from its network, revenue totaled US$1.12 billion, missing the consensus expectation of US$1.14 billion from analysts polled by Thomson Financial.
Last month, Yahoo announced that its revenue, excluding commissions, would be in the lower range of its forecast because it didn't sell as many ads as expected to clients in the automotive and financial services industries. Yahoo expected revenue, excluding commissions, to be in the range of US$1.11 billion to US$1.22 billion.
Yahoo met analysts' earnings-per-share expectations of US$0.11 on net income of US$159 million. That is down from net income of US$253.8 million, or US$0.17 per share, in last year's third quarter.
In this year's second quarter, Yahoo also failed to match analysts' revenue expectation, and added insult to injury by delaying the roll out of its highly anticipated new advertising platform, called Project Panama, from the third quarter to the fourth quarter.
Yahoo's financial performance is often contrasted with the generally stellar one of its biggest rival Google. Both companies generate most of their revenue from sales of online advertising and attract visitors to their Web sites by providing a variety of online services, like Internet search, Web mail, photo management and online video.