Yahoo Heaped With Negative Vibes

    July 11, 2007
    WebProNews Staff

Between Google and a seemingly endless slew of challengers like Facebook and MySpace, Yahoo could be grilled like a panini in the battle for display advertising dollars.

Yahoo Heaped With Negative Vibes
Yahoo Heaped With Negative Vibes

Even as Google kicked seven kinds of snot out of Yahoo and everyone else in the search advertising market, Yahoo always had its display ad business as a bulwark against disaster.

That may have accounted for Yahoo president Sue Decker’s breezy comment to Bloomberg in January 2006 about how Yahoo is not going to be number one in search. So long as the display dollars kept flowing into Sunnyvale in the billions, why worry?

Bloomberg came back with a reason why, 18 months later. In a recent report, Bloomberg cited some trends that have Wall Street pros muttering darkly about Yahoo:

Yahoo said June 18 that second-quarter sales will be at the middle to low end of its forecast because of slowing display growth.

Year-to-year sales growth in the category decelerated from 38 percent in the first quarter of 2006 to 20 percent in this year’s first quarter and less than 10 percent in the second quarter, estimates Jefferies & Co. analyst Youssef Squali, who is based in New York and rates the shares “buy.”

“We’re seeing some shifts,” Yahoo spokeswoman Joanna Stevens said. “Advertisers have started to experiment with different forms of display advertising.”

Names like Facebook and MySpace have received some of the credit for picking where Yahoo has been fading. The next question: how long will co-founder and new CEO Jerry Yang want to stick it out as top executive, especially if Wall Street continues to exude a lack of confidence in the company’s once-touted display ad business?