Yahoo Base Case

By David F. Carr  |  Posted 2007-10-26 Email Print this article 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

HEADQUARTERS:
701 First Avenue, Sunnyvale, CA 94089

PHONE:
(408) 349-3300

BUSINESS:
Internet media and technology company

CTO:
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

CHALLENGES:
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.

BASELINE GOALS:

  • 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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David F. Carr David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.
 
 
 
 
 
 

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