Yahoo Disappoints With Weak Ad Sales

    September 20, 2006
    WebProNews Staff

Advertising buyers in the financial and automotive sectors have been tightening their purse strings, in what is either a cyclical slowdown in ad spending that will perk up later in the year, or the frightening prospect that contextual search has beaten display advertising as the preferred method of grabbing eyeballs online.

Either way, The Fear of an economic slowdown came to Yahoo investors yesterday.

From New York at a Goldman Sachs conference that was chock full of Wall Street insiders, Yahoo CFO Susan Decker told attendees to expect Yahoo’s third quarter numbers to come in at the low end of their forecast.

A Reuters report on Decker’s comments picked up on her assessment that the two sectors have shown “a little bit of weakness” in their spending”

“It’s a new trend. It’s been two to three weeks and we don’t know yet if it’s an indicator of a broader slowdown,” Decker later told reporters at the conference.

“We’re seeing it enough to say something,” she said. “I don’t want to overplay it either.”

While the auto buying slowdown may be something that should have been expected, considering high gas prices and lots full of GM and Ford trucks and SUVs being shunned by buyers, the financial sector retreat may be more unexpected.

Perhaps search ties in to the fallback by the financial industry in online spending. Real estate could tie into that too.

For example, Yahoo has made an effort to increase the effectiveness of real estate-related queries made through its search engine.

They have partnered with Zillow to provide home value information and revamped the Yahoo Real Estate site in recent weeks.

If financial institutions are finding more home purchasers coming to them from paid or organic search than through the display advertising model that is Yahoo’s strength, it may be a matter of that sector finding a better return on investment overall from search.

And one company dominates that search market.


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David Utter is a staff writer for WebProNews covering technology and business.