UPDATE 2-Yahoo posts lower profit, gives weak 2007 forecast

(Adds executive comments, details, background)

By Eric Auchard

SAN FRANCISCO, July 17 (Reuters) - Yahoo Inc. (YHOO.O) reported a dip in quarterly profit on Tuesday as corporate advertisers spent less on its online ads, and the company gave a weaker-than-expected forecast for the rest of 2007.

Shares in the Internet media company fell 3.6 percent in extended trade. Investors are waiting to gauge the strategy of a newly revamped management team that must contend with the growing strength of rival Google Inc. (GOOG.O).

"Push is coming to shove at Yahoo," said RBC Capital Markets analyst Jordan Rohan. "We can see why (former Chief Executive) Terry Semel volunteered to exit stage left. It's a mess."

Jerry Yang, the company's co-founder who took the CEO job in June, vowed to deliver a new strategic plan for Yahoo, seeking to convince investors he is open to change.

"I intend to spend the next 100 days or so focused on mapping out a strategic plan," Yang told Wall Street analysts on a quarterly conference call. "There are no sacred cows."

"I may not have all the answers, as of today, but I have a pretty strong idea of where I want to go," he said.

Net income for the second quarter fell to $161 million, or 11 cents per diluted share, from the year-earlier quarter's $164 million, or 11 cents per diluted share.

The earnings were in line with the company's previously lowered forecast and Wall Street's adjusted expectations.

Earnings excluding one-time items and stock options expenses were $238 million, or 17 cents per share, compared with $241 million, or 16 cents per share, a year ago.

Revenue excluding the cost of payments to advertising partners, or so-called traffic acquisition costs (TAC), rose 11 percent to $1.24 billion.

Analysts, on average, had predicted revenue excluding TAC of $1.243 billion, according to Reuters Estimates forecasts ranging from $1.20 billion to $1.29 billion.

By contrast, Google, the leading provider of Web search and pay-per-click ads, is expected to post later this week at least four-times-faster revenue growth in its own quarterly results.

LOWER VIEW FOR 2007

Yahoo has disappointed investors in five of the last six quarters and seen its share price drop roughly 30 percent since the start of 2006.