Yahoo’s overhaul of its advertising systems ran into a fresh challenge on Tuesday as it disclosed that the shift to user-generated content on the internet, symbolised by the rise of MySpace and YouTube, had pushed its growth rate below expectations in the first quarter.

The news wiped about 8 per cent off Yahoo’s share price in after-market trading, ending a strong rally this year that came on hopes that a revamp of its search advertising system would finally prove effective.