Yahoo!'s announcement last night that it is to delay its upgraded search advertising function dented its share price as well as that of eBay, its strategic partner.

EBay's shares fell by 3% while those of Google, Yahoo!'s search rival, were almost 3% down, despite the company revealing a global roll-out of its potentially lucrative video advertising product.

Yahoo!'s own share price crashed by 14% and has fallen 29% since the start of the year.

Second-quarter net profits fell to $164m (£89.8m) from $755m (£413m) on the year.

While this was in line with market expectations, Yahoo!'s revenue forecast of between $1.12bn (£62m) and $1.23bn (£67m) for the third quarter was down on analysts' expectations of between $1.15bn (£63m) and $1.24bn (£68m).

The company's net revenue rose 28% to $1.12bn (£62m). Yahoo! said its upgraded search facility would enable advertisers to target consumers with greater accuracy by analysing the words they type in online, but this has taken longer than expected to develop.

The search firm is also to launch an internet TV facility, giving subscribers access to aggregated content from ABC News and CBS's 60 Minutes.

Yahoo! and eBay struck a strategic alliance in May to strengthen their position against Google and Microsoft.

· To contact the MediaGuardian newsdesk email editor@mediatheguardian.com or phone 020 7239 9857

· If you are writing a comment for publication, please mark clearly "for publication".