was down more than 28% in Instinet premarket trading after lowering its third-quarter revenue guidance.

The company now expects third-quarter revenue of between $70 million and $75 million after originally forecasting flat to 10% lower revenue than last quarter's $87.1 million. Analysts had been expecting $84.24 million, according to Thomson Financial/First Call.

The Internet business application company said the reduced guidance was due to tough economic conditions, and the company no longer expects to reach profitability by the end of this fiscal year.

Macromedia shares closed up $1.17 to $27.17 Wednesday before the announcement and were recently down to $19.40 in premarket action.