Yahoo falls after hours on ad worries

SANTA CLARA, Calif. (CBS.MW) -- Yahoo shares fell more than 3 percent in after-hours trading Wednesday after company CEO Tim Koogle warned that advertising sales for both traditional and online companies would be weak for at least two more quarters.

Yahoo (YHOO) shares were trading at $109 on Island ECN, down nearly 3 percent from its closing price of $112.06. That's on top of a 4.3 percent loss during the day.

Selling intensified during the course of the day after Koogle made comments this afternoon at the Robertson Stephens Internet Conference in San Francisco.

Asked whether Yahoo will continue to see weakness in advertising, both traditional and dot-com, Koogle said it's hard to gauge, but he believes the difficult period will continue for two more quarters.

Koogle said that there has been a "period of consolidation under way" in advertising, estimating that it began about 10 months. A consequence of consolidation is that a "bit of upside" has been taken away from all participants. See full story.

Company representatives said Koogle's comments about the difficulties facing companies that rely on online advertising were taken out of context.

While the short-term upside for online advertising may have decreased, Koogle said at the conference, the long-term potential for growth is still there.

Yahoo said a news article published after Koogle spoke at the conference incorrectly reported Koogle said advertising spending was consolidating.