Updated from 2:30 p.m. EDT

ValueClick

(VCLK)

, an Internet advertising firm, said Friday that quarterly revenues will fall short of Wall Street's expectations by about 25%.

The Westlake Village, Calif. company's shares closed unchanged at $8.56.

The company said revenue for the third quarter will be between $9.5 million and $10 million, while analysts had predicted revenue would exceed $12 million.

"This is further confirmation that there's a dramatic shift taking place," said Jordan Rohan, analyst for

Wit SoundView

. The firm co-managed ValueClick's initial public offering in March, and Rohan rates the shares buy. "There are competitors out there accepting very low prices for their inventory," he said.

Three analysts polled by

First Call/Thomson Financial

expect the company will report a break-even quarter. In a telephone interview, Kurt Johnson, the company's chief financial officer, said those earnings predictions, as well as estimates of a $1.2 million operating loss, could be affected by currency fluctuations. The company has been starting international operations.

Johnson said he does not expect to turn a profit until the first quarter of 2001, back from previous predictions of a profit in the fourth quarter 2000. But he added that the company, which charges its clients based on the number of clicks on their advertisements, has maintained its prices and upheld gross margins of 50%. "Our business model all along has been built to withstand these kinds of market conditions," he said.

Rohan and the company sought to emphasize the difference between companies like ValueClick that charge advertisers based on the number of times Web users click on their advertisements, and others that charge based on the number of times Web users see the image. But factors that have caused a slowdown in online advertising spending will affect all the companies, other analysts said.

Engage

(ENGA)

, an online advertiser that often charges for image views, reported earnings Thursday that surpassed Wall Street's expectations, but it said revenue from online advertising sales fell 28%.

In recent weeks, announcements of revenue shortfall by online advertising companies,

Avenue A

(AVEA)

and

TST Recommends

Mediaplex

(MPLX) - Get Report

, caused analysts to spot the trend, which many of them now say includes ValueClick's announcement.

At the other end of the chain, concerns about slowed advertising spending have caused shares of

Yahoo!

(YHOO)

, whose network of Web sites is among the most visible places to put an ad online, to slump in recent weeks.

"What you had in essence was transfer payments from venture capitalists to dot-coms to media companies," said Lowell Singer, senior Internet analyst for

Robertson Stephens

.

But as funding for e-commerce companies has grown scarce, Internet companies have sought to reduce their cash burn rates, producing a dearth of advertising dollars. "We need to have traditional advertisers -- offline advertisers like

Procter & Gamble

(PG) - Get Report

,

Coca-Cola

(KO) - Get Report

and

PepsiCo

(PEP) - Get Report

, and the automobile industry -- to get more comfortable with the medium," said David Doft, analyst for

ING Barings

.