NEW YORK (CNNMoney.com) -- Online media company Yahoo!, which is struggling to keep pace with top rival Google, reported third quarter sales Tuesday that were lower than expected, earnings that matched analysts' forecasts, and a current quarter outlook less robust than previously forecast.

But the company also had some good news. Yahoo's chief executive officer said during a conference call with analysts that its long-awaited new search technology was now live.

Shares of Yahoo have plunged this year as investors (and advertisers) seem to be more interested in Google instead.

Shares of Yahoo (Charts) seesawed in after-hours trading Tuesday. The stock initially traded higher after the earnings were released but quickly lost ground and at one point were down as much as 4 percent. The stock recovered from these losses though and moved as much as 5 percent higher after Yahoo CEO Terry Semel made the comments about its new search platform for advertisers.

Yahoo fell slightly in regular trading on the Nasdaq after the stock was downgraded to a "neutral" by Cowen & Co.

The Sunnyvale, Calif.-based Yahoo reported revenue, excluding sales it shares with affiliates, of $1.12 billion, up 20 percent from a year ago, but below Wall Street's consensus estimates of $1.14 billion.

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