Yahoo! posted its second quarter financial results yesterday, reporting a decline in income from display advertising and lowering its guidance for the rest of the year.
The firm's profits dropped by 11% to $161m (£80.5m) in the three months, but revenues rose by 11% to $1.24bn (£605m).
The company also lowered its forecast for revenue for the year, from $4.95bn-$5.45bn to $4.89bn-$5.19bn.
Jerry Yang, who became CEO in June, said that the company needs a new plan:
"I intend to spend the next 100 days or so focused on mapping out a strategic plan. There are no sacred cows."
By contrast, Google is expected to show at least four-times-faster revenue growth when it releases its quarterly report on Thursday.
In further bad news for Yahoo!, a report from SearchIgnite and RBC reveals that Google earned more per search in Q2 2007 than both Microsoft and Yahoo!.
Google swallows up 76% of ad spending on the top three engines, despite the fact that it received 60% of searches. Yahoo! earned just 18.3% of ad spend even though it received 34% of searches in the same period.
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