Shares of Yahoo slid by 12 per cent Wednesday after it reported disappointing earnings.
Yahoo stock closed at $28.31 US, down $3.78 a share.
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Late Tuesday, the internet giant said its first-quarter profit fell 11 per cent to $142.4 million US. Sales for the three months were up seven per cent to $1.67 billion US, but lower than expectations after subtracting advertising commissions.
Following the report, a handful of analysts shaved their earnings estimates on Yahoo's future results.
Yahoo recently launched its new marketing platform, called Panama in the U.S., which is intended to improve how ads are distributed on its site by encouraging more clicks. Panama is not expected to boost the company's profits until the second half of this year.
The company's stock has been on a roller-coaster ride. It was up 26 per cent this year, before Wednesday's big drop. Last year, when Yahoo delayed Panama's debut, the stock got hit, erasing billions of dollars for shareholders.
Market watchers are worried that Yahoo is losing against its chief rival, Google, which has a more lucrative advertising network that could soon include DoubleClick. Google recently announced its plan to buy the online advertising placement service.
Google is set to announce its quarterly results Thursday.
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