Last year certainly turned out to be tough for WebMD (NASDAQ:WBMD), with the stock dropping over 26% in the past 12 months. Unfortunately, the bad times have continued into the new year.

Today comes news that the company has taken itself off the auction block. Despite the buzz that Yahoo (NASDAQ:YHOO) or Alibaba may have been interested in buying the company, the interest was apparently tepid.

There was another bombshell: WebMD Chief Executive Officer Wayne Gattinella has resigned. Anthony Vuolo, the company’s chief financial officer, will become interim CEO. In Tuesday morning trading, WBMD shares are getting slammed, down 26%, or nearly $10, to just around $27.

So why all the drama? WebMD is facing downward pressure on its advertising revenues. For the most part, the big pharma operators have been pulling back on spending because of smaller new-drug pipelines, regulatory constraints and the sluggish economy.

At the same time, WebMD must deal with a variety of other online competitors that are making inroads. Even social networks like Facebook represent a serious threat.

For 2012, WebMD forecasts a decline of anywhere from 2% to 8% in revenues. But costs are expected to increase between 5% to 8%. Meantime, WebMD is spending aggressively to roll out new offerings, such as mobile apps.

WebMD is still the clear leader in the online consumer health care info, with customers like Wal-Mart (NYSE:WMT), Starbucks (NASDAQ:SBUX) and WellPoint (NYSE:WLP). It not only operates Webmd.com but also other highly popular sites like MedicineNet, eMedicineHealth and RxList. Traffic is running at 87.8 million unique users per month, up 31% from a year ago. Page views come to about 2 billion per quarter.

WebMD also operates  Medscape, which provides tools for medical professionals. This service attracts roughly 2.5 million physician visits per month.

In fact, WebMD also has a big opportunity in global markets. For example, its U.K. platform — BootsWebMD — is getting lots of traction.

Yet investors see only reasons to sell. For the first part of this year, catalysts to change their minds will be unlikely. It could easily take a year to get any momentum back.

And yes, billionaire investor Carl Icahn owns nearly 10% of WebMD. True, he’s likely to make some noise, but he can’t really do much. His approach is usually to incite other bidders to the table. But so far, this looks like a dead end.

Tom Taulli runs the InvestorPlace blog “IPOPlaybook,” a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned stocks.