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January 29, 2008
Yahoo: Weak and Worrisome Results
Today's financial results from Yahoo were weak and worrisome. The company's value as a standalone company is spiraling downward, as is its value as an acquisition, strategic or otherwise, and drastic action is required.
Here is a company that, despite market-leading pageviews, managed to lose material ground in both pageviews and corresponding advertising during what will likely turn out to have been the easiest money period in online advertising history, past or future. How will Yahoo do in a more competitive ad market, from a worse pageview platform, and with online ad spending being trimmed in a weakening economy? Considerably worse, anyone but a clinically deranged optimist would think.
The upshot: Any future that looks like Yahoo's recent operational past is a non-starter.
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YHOO brings in and keeps plenty of money, but I think their pageview stats actually make things look worse than they are because people expect more from them. In reality, a YHOO pageview isn't as valuable as might be expected, because so many of them are generated from their Yahoo Mail property (which still dominates GMail in terms of #s of users), which is the last place anyone wants to see ads or buy something. That's what search results are for, which is where Google rules (duh). Mail = task-focused productivity time = not easily distracted, whereas search = info gathering time = open frame of mind susceptible to clicking and diving into rabbit holes.