Local-search provider Local.com Corp said its revenue model was under pressure following partner Yahoo Inc's move to Microsoft Corp's Bing search engine, sending Local's shares tumbling 21 percent.

Bing is charging advertisers less for Local's search traffic, which resulted in less revenue per click (RPC) than what Yahoo had paid prior to the integration of its search engine with Microsoft, the company said in a statement.

The company, which throws up search results for local businesses, products and services, cut its fourth-quarter outlook and said it expects limited visibility for the next quarter or two.

It may take several more months for us to adapt our business to the Yahoo-Bing integration and to execute a variety of strategies, Chief Executive Heath Clarke said.

The company cautioned that if it is unable to improve RPC in the near term, 2011 first quarter revenue and adjusted net income may be even lower than current fourth-quarter expectations.

The company now sees fourth-quarter adjusted earnings of 19 cents a share on revenue of $19.9 million, down from its previous forecast of 20-21 cents a share on revenue of $22-$23 million.

Clarke said a part of the company's strategy going forward was to diversify our ad products and technology platforms, as evidenced by our just-announced entry into the group-buying space.

On Friday, Local said it acquired privately held group-buying platform iTwango LLC for an undisclosed amount.

Group-buying, as practised by services like Groupon, is the purchasing of discounted or special offers from a business by a minimum number of buyers.

Retailers like Amazon.com and eBay Inc are increasingly investing in local platforms to attract group buyers, as customers flock online for deals and discounts.

Shares of Irvine, California-based Local.com were trading down 21 percent at $5.60 on Friday on Nasdaq.

(Reporting by NR Sethuraman in Bangalore; Editing by Sriraj Kalluvila)