Internet powerhouse Yahoo Inc.'s (YHOO) shares tumbled Wednesday as the company suffered a hangover from second-quarter earnings that didn't measure up to analysts' lofty expectations despite a more than six-fold improvement in its profit.

Yahoo reported earnings Tuesday after the market closed. Its shares fell $4.20, or 11 percent, to $33.53 Wednesday on the Nasdaq Stock Market (search).

The earnings letdown could be nothing more than a seasonal hiccup, reflecting a shift in Internet usage as people began to spend more time outside when the weather became warmer and the daylights hour grew longer, said Piper Jaffray analyst Safa Rashtchy.

The worst fear is that Yahoo's results foreshadow decelerating financial growth and could signal trouble ahead for high-flying Google Inc. (GOOG) — another Internet bellwether that depends on online advertising to fuel its rapid growth.

Mountain View-based Google loomed large in Yahoo's quarterly results released after the stock market closing Tuesday.

Yahoo earned $754.7 million, or 51 cents per share, during the three months ended in June. That compared with a profit of $112.5 million, or 8 cents per share, at the same time last year.

The profit included a gain of $563 million, or 38 cents per share, that Yahoo realized by selling its remaining chunk of Google stock, which has soared by 61 percent so far this year. Yahoo acquired the Google stake by investing in its rival's early development and subsequently settling a patent settlement over the way search engines distribute advertising.

Excluding the one-time investment gain, Yahoo's earnings matched the mean estimate among analysts polled by Thomson Financial. The revenue, minus advertising commissions, fell slightly below the mean estimate of $881 million, according to Thomson Financial.

Revenue totaled $1.25 billion, a 51 percent increase from $832.3 million last year. After subtracting the commissions Yahoo paid to other Web sites in its advertising network, the company's revenue stood at $875 million, up 44 percent from last year.

Even as investors punished the company, Yahoo CEO Terry Semel (search) hailed the results as the latest chapter in a continuing success story. "This is a very exciting time for our company," he told investors during a Tuesday conference call. "We have a balanced and healthy business model in which all parts are performing well."

Despite Semel's optimism, Yahoo didn't raise its revenue or earnings estimates for the remainder of the year, another possible source of investor disappointment.

"With a stock like this, you have to beat and raise (expectations) to keep things running," American Technology Research analyst David Edwards said. "There continues to be expectations that this company is going to outperform and outperform. But you have to take a step back and wonder how much longer it can keeping growing at these rates."

Yahoo's Web site, already the most trafficked, continued to win more fans during the second quarter.

Yahoo ended June with 181 million active registered users, a 23 percent increase from the same time last year. The audience included 10.1 million subscribers, a 58 percent increase from last year.

The company is hoping to have more than 12 million subscribers by the end of this year, partly by offering new products, such as a discount music rental service that it began testing in May as an alternative to Apple Computer Inc.'s market-leading iTunes store. Yahoo expects to shift the music service out of the test phase and spend more advertising it during the current quarter.

Despite its success, Yahoo has been largely overshadowed by Google, which has been riding its Internet-leading search engine to even more robust earnings growth.

Lifted by the rapid appreciation of its stock this year, Google ended Tuesday with a market value of just under $90 billion while Yahoo was worth $56 billion.

The premium being placed on Google largely reflects its grip on the search engine market — the Internet's financial hot spot. Through June, Google 36.9 percent share of the U.S. market, outdistancing Yahoo's 30.4 percent share, according to comScore Networks.

The investor backlash to Yahoo's second-quarter profit highlights the vulnerability of Google's lofty stock the first time that company doesn't surpass the earnings expectations set by industry analysts. The company has easily exceeded expectations in all three quarters that it has reported since going public, but the chances of a shortfall loom large because Google's management steadfastly refuses to provide financial guidance to analysts.

Google is expected to post second-quarter earnings of $1.21 per share when it releases its results Thursday. Rashtchy believes Google will top that number, partly because it has traditionally done a better job than Yahoo at converting search engine requests into revenue-generating clicks on advertisements.