Yahoo Base CaseBy David F. Carr Print
Losing its lead in Internet traffic and ad revenue along with its chance to win the search market, Yahoo aims to reinvent itself. But with a slowing economy and downward forecasts for earnings, how bad are things for Yahoo? That could depend on Microsoft’s plans to buy the struggling Web portal.
Yahoo Base Case
701 First Avenue, Sunnyvale, CA 94089
Internet media and technology company
Jerry Yang stepped into this role after the departure of CTO Zod Nazem in May, before Yang was bumped up to CEO. Co-founder and Chief Yahoo David Filo plays a strong behindthe- scenes role in Yahoo's technology choices but doesn't appear to covet the CTO title.
FINANCIALS IN 2006:
$6.4 billion in revenue, with net income of $751 million
Yahoo must find ways to sustain its audience, maintain its base of loyal, registered users, and figure out better ways to make money off those users through search marketing and other forms of advertising.
- As of October, Yahoo said it was aiming for between $5 billion in sales for 2007 (excluding "traffic acquisition," the cost of working with affiliates to drive traffic to Yahoo), compared with $4.6 billion for 2006.
- In the same report, Yahoo said it was targeting operating income of $658 million to $678 million for 2007, compared with $941 million in 2006, as it invests in improving its business.
- Yahoo points to the growth in advertising revenue on its "owned and operated" Web sites as a trend it aims to continue. In that segment, search advertising revenue rose 30% and display advertising rose 20% from a year ago in the third quarter, according to the company. However, Yahoo must also reverse a downward trend in advertising income from affiliate Web sites.
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