Jan 29, 2008

Yahoo Sales Into "Headwinds"

Looks like things are about to get pretty interesting @ Yahoo. The #1 General Interest Portal and #2 Search Engine - released it's Q4 earnings report today - and things aren't looking too good. It reported a 23% drop in fourth-quarter profit and will lay off over 1,000 of its 14,300 employees in mid-February. On a slightly positive note, Revenue is up 8%, US RPS is up 20%, Search Revenue is up 30%, while Query Volume reported a 10% increase. 2008 Net Revenue Guidance is $5.35 to $5.95 billion, versus consensus of $5.9 billion.
Yahoo appears to be focusing on strengthening their core Search Business - in key markets. In doing so, they're doing away with specific partnerships or affiliates which haven't yielded the desired returns. Traffic Acquisition Costs (TAC) rates have been renegotiated 72% to 80%. Interestingly, Yahoo President - Sue Decker, indicated that there was weaker online-ad spending during the quarter among some categories of advertisers affected by broader economic issues. Spending by advertisers in the financial, travel and retail areas declined or grew more slowly in the fourth quarter compared with a year earlier. There are however indications that key online categories including Auto, Pharmaceuticals & Telecoms are projecting growth in online budgets in 2008.

Can't wait to see what type of returns, Google delivers - on Thursday 01/31. Hey Jerry, watch out for those headwinds, they could easily sink your ship, or at the very least - blow you significantly of course and into troubled waters......

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