LOS ANGELES (AFX) -- Shares of Internet-related companies closed mostly lower Friday, with Expedia Inc. plunging 26% as investors punished the online travel firm for a disappointing set of quarterly results.
Late Thursday, Expedia said first-quarter net profit dropped to $23.3 million, or 6 cents a share, from the $48 million, or 14 cents, earned in the year-ago period. Excluding items, income would have been $57 million, or 15 cents a share, down sharply from $93 million, or 27 cents a share.
Expedia's revenue rose 1.8% to $493.9 million from $485 million, well short of Wall Street's average estimate, which called for $544 million in sales.
Expedia's stock felt the sting of rebuke as analysts issued downbeat comments on the stock following the results.
Analyst Aaron Kessler at Piper Jaffray told clients he 'would avoid shares until we see a stabilization in the domestic business, which likely won't happen until the end of 2006 at the earliest.'
The shares dropped as low as $14.37 and tumbled by $5.15, or just more than 26%, to close at $14.51. The slump put the stock at a new 52-week low as it quickly fell through a prior yearly low of $17.42 set March 22.
Overall, the Dow Jones Internet Composite Index fell 2%, while the broader tech-heavy Nasdaq Composite Index pared 1.3% to 2,244.
Elsewhere, Yahoo Inc. rebuffed an approach by Microsoft Corp., the world's largest software company, to take a stake in the Net bellwether, according to a report published by the Financial Times.
Yahoo Chief Executive Terry Semel reportedly said the two companies had discussed 'search, and Microsoft co-owning some of our search,' Semel was quoted as saying during a talk at Syracuse University.
'I will not sell a piece of search -- it is like selling your right arm while keeping your left. It does not make any sense,' Semel said, according to the newspaper report.
Yahoo's shares eased 18 cents, or 0.6%, to $30.81, while Microsoft dipped 5 cents to $23.17.
Microsoft's MSN search trails behind both market leader Google Inc. and Yahoo.
Google's stock fell $12.87, or 3.3%, to $374.13.
Among other benchmarks in the sector, shares of eBay Inc. , Amazon.com Inc. , Priceline.com Inc. , VeriSign Inc. and CNet Networks Inc. all fell. This story was supplied by MarketWatch. For further information see www.marketwatch.com.