Yahoo Search Revenues Get No Respect

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I’m at Search Engine Strategies in Stockholm today. One of a number of points I put forward in the Ad Forum session today was jumping off yesterday’s Yahoo earnings announcement. The company’s flat profit for the quarter surpassed estimates.

Yahoo Search Revenues Get No Respect
Apparently, He Has Something In Common With Yahoo…

Editor’s Note: Discuss Yahoo’s Earning Announcement at WebProWorld.

A bit of background on that: I tuned into CNBC to hear the comments of an analyst from a firm that owns sizeable stakes in both Yahoo and Google. When the initial question was put to him point blank, “what do you think of these results? are you encouraged or disappointed?”

“I’m encouraged,” came the response out of a face that wore a scowl that could only be caused by a four-alarm headache, or perhaps not really feeling encouraged, but needing to stay upbeat for the cameras, but also needing to avoid sounding like he’s shilling for the stock, since analysts never shill, right?

Another telling point was in attempting to explain the different P/E revenues of Yahoo and Google. “I think they’re appropriately valued relative to each other,” was the ultimate conclusion. He really emphasized that last point.

The thing that really amazed me, though, was when the host asked “what do you think is more important to Yahoo, and which do you think is more important… the banners, or the, if you will, companies that pay to be seen in the search results, over to the right hand side of the page, if you will?”

The answer was banners.

Why? Perhaps (indirectly) because top management at Yahoo (not those in the Overture division, clearly) believe the company’s future lies in the whole media package. Perhaps so. Perhaps also because the stock market is likely to reward a company with a big fuzzy upside, and Yahoo can’t create the perception of big fuzzy upsides solely through search (at least not in North America, where it’s harder to induce investors to lap up the Kool-Aid of trends like mobile search).

But search saved the whole company and is funding a lot of the current growth. Where’s the love, if you will? Why is search still the ugly cousin? Perhaps it’s a simple as this: the long tail of user search behavior, and all that entails, isn’t really amenable to a five-second sound bite. In that long tail lurks all the upside anyone could ever need or want.

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Andrew Goodman is Principal of Page Zero Media, a marketing consultancy which focuses on maximizing clients’ paid search marketing campaigns.

In 1999 Andrew co-founded Traffick.com, an acclaimed “guide to portals” which foresaw the rise of trends such as paid search and semantic analysis.

Yahoo Search Revenues Get No Respect
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