Yahoo Conference Call

The highlight of the Yahoo conference call tonight has come early:

We … [expect] revenue per search to begin to improve in the later part of Q2. We actually see Q1 as probably the trough in revenue for search although we started out pretty strong. So we expect it to trough in Q1 and to start picking up in Q2 with double-digit growth in the back half.

The bulls will be elated, and the bears … distressed.

Why so soon? Because Yahoo says that most of its advertisers are already on Panama, and the impact will be seen by the end of the quarter. That’s earlier, I think, than most people were expecting.

Overall, I like this report, as well as the subsequent call, and I was entertained at how, once again, an errant early headline focusing on something extraneous — option costs — drove trading down before the current rapid recovery.


  1. As a shareholder, I was pleasantly suprised on the results. Suprise that they beat Q4 EPS by such a wide margin, but I could be reading it wrong. Good news about the early Panama ranking model in 2/5. I have been using the Panama interface and it is extremely good almost and the kw is almost on par with Google. I am sure that given time it will be better.
    Only concern is the downward guidance. If panama is going to increase in the back half, why the downward guidance? Are they just being cautios?

  2. I don’t know Paul, I listened and heard Sue Decker say the “back half of the year” – meaning RPS wouldn’t be heading up until LATE Q2. That doesn’t seem earlier than they’ve said before.
    Furthermore, Decker clearly stated that the lowered 2007 guidance took all Panama effects into account.
    Here’s the rest of my view on the call:
    Finally, as a heavy Panama user, I can tell you that it is very unlikely that most of their advertisers are already deployed in it.
    Maybe Yahoo is happy continuing to pre-lower expectations, like they did last quarter, but to me, the call sounded like 2007 was pretty tenuous if it depends on Panama.
    Besides, shouldn’t you disclose your rooting interest in Yahoo again (I mean your prediction v. Goog) :)