Yahoo posts 18% dip on profit, fails to meet expecations

Yahoo's second-quarter profit fell 18%, the latest sign of the financial decay that has frustrated shareholders and raised doubts about the internet company's future, an Associated Press report said.

But while the results released Tuesday missed analyst expectations, the performance wasn't as bad as many investors had feared after internet search and advertising leader Google's second-quarter earnings disappointed Wall Street last week, the Associated Press report said.

The company earned €83 million (US$131 million) from April through June, compared with €101 million (US$161 million) at the same time last year.

Revenue totaled €1.1 billion (US$1.8 billion), a 6% improvement from €1 billion (US$1.7 billion) at the same time last year, the report said.

After subtracting commissions paid to Yahoo's advertising partners, revenue stood at €855 million (US$1.35 billion), about €12.7 million (US$20 million) below the average analyst estimate.

To the relief of investors, Yahoo didn't dramatically lower its revenue outlook for the remainder of the year despite the dreary economic conditions in the US and part of Europe.

Management expects 2008 revenue to range from €4.6 billion (US$7.35 billion) to €4.9 billion (US$7.85 billion).

Nevertheless, Yahoo's latest lackluster performance is likely to intensify the already tremendous pressure on management to lift the company's long-slumping stock price after rebuffing a €30 billion (US$47.5 billion) takeover offer from Microsoft in May.