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Article

Title: Yahoo Bets Search-Ad Upgrade Will Boost Revenue This Year

Author: Delaney, Kevin J Article Type: Product Analysis
Source: Wall Street Journal, v249 n19 pA3(1) Publication Date: Jan 24, 2007
  ISSN: 0193-2241
  Illustrations: Charts, Graphs
URL of Publication: http://www.wsj.com

Yahoo! is betting that a major reworking of its Internet search ad system will soon improve financial results (in the next quarter). The Panama project will increase system stability, make the system more cutting edge, and increase online ad profits for Yahoo!. Google succeeded by prioritizing ads that are expected to get consumers to click them and has been able to generate much more revenue for each query than has Yahoo!, because advertisers pay only when a consumer clicks their ads. Therefore Yahoo! is adopting the same strategy used by Google, and CEO Terry Semel told analysts in a conference call that Yahoo! had moved advertisers who provide most of its U.S. search-ad revenue to the new Panama system. The rest will be upgraded by the end of the first quarter. Most will have been upgraded by February 5. Yahoo!, which had income of $683 million last year, reported net income of $269 million in its following year. Reasons for the profit drop included $56 million in stock-options-related costs, net of taxes, recorded during the fourth quarter in line with accounting changes that were effective in 2006. Youssef Squali, Internet analyst for Jefferies & Company, a company that makes a market in Yahoo! shares, stated that Yahoo! could reach its financials potential upside if Panama works as expected.

Special Features: Charts, Graphs

Companies:
TecTerms Yahoo! Inc

Products:
Search Engine Marketing Yahoo! Sponsored Search

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