An overhaul of its advertising systems by Yahoo! Inc. was challenged when the company disclosed that its shift to user-generated content over the Internet had depressed its growth rate below expectations for the first quarter of 2007. The news lowered Yahoo!'s share price by about eight percent in after-market trading and ended a strong rally in 2007 that resulted from hopes that its long-expected redesign of the search advertising system would finally come to pass. Yahoo! reported that its revenue rose nine percent in the first quarter to total $1.18 billion, excluding traffic acquisition costs that are paid to other websites carrying its advertising. This was in line with the company's own forecasts, but below the $1.21 billion predicted by analysts on Wall Street, who were surveyed by Reuters. Yahoo!'s net income dropped by 11 percent to $142 million, or ten cents per share. This was one cent below expectations. According to Terry Semel, chairman of Yahoo!, the company has made 'good progress' in its revamp of the advertising systems, as well as in the creation of new online services. Semel added, however, that the company knows it has much more to do. Executives at Yahoo!, including Semel, say the overhaul of Yahoo!'s Sponsored Search feature, which is codenamed Panama, led to better-than-expected results since its introduction in the United States in February 2007. The system will be extended to Japan, South Korea, and Europe before the end of June 2007.