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Yahoo! Inc. (Nasdaq: YHOO) fell 7 3/16 to 41 11/16 Tuesday following reports that Morgan Stanley Dean Witter analyst Mary Meeker warned clients that the company might miss its revenue targets in coming quarters because of a weak Internet advertising market.
On Monday, Yahoo! plunged on news that a French court ordered the company to bar French Internet users from accessing auctions offering Nazi memorabilia.
Tuesday's reports said Meeker gave Yahoo! a 30 percent chance of missing its revenue goals, saying that among leading Internet companies, the company faces the biggest risk of being hurt by slow sales of online ads.
Meeker's report follows similar warnings by other analysts, who say Yahoo! is more dependent on advertising revenue than its competitors. Lehman Brothers' Holly Becker and Merrill Lynch's Henry Blodget have also noted that there is an element of risk tied to the company's stock.
Though Yahoo! last month topped analysts' expectations for the third quarter, with revenue rising 90 percent from a year earlier, the company's stock has been heading lower because of concern about future quarters.
Moreover, the revenue gain did not match the triple-digit increases seen in recent years, setting off alarm bells in some investors' minds. The number of customers at the end of the quarter was also lower than at the end of the prior quarter because of "pressures" felt by some dot-coms, Yahoo! said.
The company claimed more than 166 million users during September, including
185 million registered members in Japan. E-commerce was a strong point during the
quarter, with transactions over the company's network of stores growing 300
percent from last year's third quarter, and auction transactions rising more
than 400 percent.
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