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Bearish Ad Outlook Hurts Yahoo! Shares

The stock slides some 3.5% after the close as CEO Koogle notes consolidation may dampen revenue growth.

Updated from 6:19 p.m. EDT

Shares of



slipped in the after-hours session following some less-than-rosy comments from CEO Tim Koogle at the

Robertson Stephens

Internet Conference in San Francisco.

"There is a period of consolidation under way and it's healthy, as painful as that is," Koogle said of the dot-com space, in response to a question about Yahoo!'s ad outlook. "We've been in it for about nine or 10 months, where companies and capital are getting rationalized. It will take a little of the upside away in the near term."

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Analysts have been cautious in their predictions of what Yahoo!'s ad revenues will amount to in the third quarter ending Sept. 30. A

pessimistic research report put out by

Lehman Brothers

analyst Holly Becker hurt Yahoo! shares Aug. 28. And a negative article in

The Wall Street Journal

last Friday knocked it further still.

The company is expected to report revenue of around $280 million for its third quarter, up from $270.1 million in the second quarter. Yahoo!, which traded as low as $104 on


, down $8.06 from its regular-session close, recently gained some of that back, trading at $108.