Yahoo's shares plummeted after it reported relatively weak search ad revenues and a delay in Project Panama, the new online ad platform it has pinned its hopes on for catching Google.

Yahoo CEO Terry Semel is quoted by the New York Times as having said the new ad system, already behind schedule, would be delayed again at least three months, because engineers wanted more time for testing with clients. Yahoo may even delay the debut of Project Panama until next year, after the holiday shopping season (though that's the timeframe reported by Forbes in April).

Yahoo earned $164 million in the second quarter - 11 cents on a per-share basis, matching analyst expectations. Revenue was $1.58 billion, up 26 percent from a year earlier; excluding traffic acquisition costs, revs were $1.12 billion, up 28 percent. Advertising and other marketing services revenue was $1.39 billion, up 27 percent.

Piper Jaffray analyst Safa Rashtchy estimated (Yahoo does not provide a breakdown) that search-based ad revenue fell 4 percent, to $521 million, while display ad revs increased 36 percent, to $358 million.