Yelp Inc. lowered its revenue guidance for the year, citing slower sales growth and the elimination of its brand advertising product.
The review site expects revenue of $544 million to $550 million for the year, down from prior guidance of $574 million to $579 million.
Yelp said it plans to phase out its brand advertising product by the end of 2015 to continue its focus on the consumer experience and its native, local advertising products.
In after-hours trading, shares plunged 15% to $28.41.
The company said its second-quarter earnings excluding items declined 0.7%, while revenue grew 51% to $133.9 million.
Yelp's rate of traffic growth has been a concern for some investors. In April, the company said it would no longer provide total monthly unique visitors, focusing instead on desktop and mobile monthly unique visitors.
The company said Tuesday that monthly mobile unique visitors rose 22% to about 83 million on a monthly average basis, while desktop visitors were about 79 million, marking the first time that mobile traffic was higher than desktop.
"Consumers are increasingly turning to apps when using their mobile phones, and we are excited about the growth we've seen in app usage which accelerated to 51% year over year," the company said. .
(By Josh Beckerman and Maria Armental)