Yahoo has announced that it will only break even and it is losing its chief executive. Online ads are proving a washout for the firm.
Chief executive Tim Koogle will step down and the company's goal is now simply to break even, Yahoo officials said last week.
Internet advertising is proving a white elephant for Yahoo, said Koogle in a conference last week.
Lack of interest in online advertising has affected both dotcom and traditional markets, Koogle said. Companies have also cut back on spending perceiving an uncertain future for the US economy.
"Anybody in the dotcom industry that depends on other dotcoms is facing a nasty pinch, said Whit Andrews, Gartner Group's research director. "You take those things and put them together and you have a big, ugly, wrenching skin twist."