Updated from 7:51 a.m. EDT

Yahoo! ( YHOO) joined the tech sector's walking wounded, shocking Wall Street with lukewarm second-quarter results late Wednesday.

For its second quarter ended June 30, the Sunnyvale, Calif., Net media giant earned $113 million, or 8 cents a share, on net revenue of $609 million. A year ago, the company earned $51 million, or 4 cents a share, on revenue of $321 million.

The numbers were mostly in line with estimates: The Thomson First Call analyst consensus estimate called for second-quarter earnings of 8 cents a share on revenue of $611 million. But the company guided toward a weaker-than-expected third quarter, and its rich multiple makes investors anxious any time Yahoo! fails to outperform.

For those who were expecting Yahoo! to beat the second-quarter revenue consensus, the disappointment appeared to stem from a shortfall in its core business of marketing services, which encompasses both traditional, branded advertising and paid search. On a conference call with analysts and investors, CEO Terry Semel boosted his growth forecast in that business for the coming quarter, but the damage was done.

After falling more than 10% earlier, Yahoo! shares were recently down $1.62, or 5%, to $30.98. The dip still left the stock some 20% below last Wednesday's 52-week high. A slew of Internet and other technology shares were whacked on the news as well.

Mixed Bag

To be sure, the latest-quarter figures weren't uniformly disappointing. Yahoo! posted second-quarter operating income before depreciation and amortization, or OIBDA, of $234 million, which is comfortably above the $227 million median estimate of Wall Street analysts.

Yahoo! also raised full-year guidance. The company raised its net revenue forecast to $2.46 billion to $2.54 billion from the previous range of $2.41 billion to $2.52 billion. The company now expects OIBDA for 2004 to hit $945 million to $995 million, up from the previous $890 million to $970 million projection.

On a postclose conference call, Semel said the marketing services business would grow more than 35% on an organic basis -- that is, excluding acquisitions -- in 2004. The company had previously forecast an organic growth rate "approaching" 35%.

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