BooHoo
The most jarring of statements in Yahoo’s horrible fourth quarter earnings and guidance: “Spending by advertisers in the financial, travel and retail areas declined or grew more slowly in the fourth quarter compared with a year earlier, Yahoo President Susan Decker told analysts during a conference call.”
The only problem: those three categories are the most sophisticated spenders and account for more than a half of all online advertising. A haunting sign that the leading categories are experiencing weakness. Much better if they were to say CPG and Auto.
Something is going to happen to Yahoo and soon. My golden rule of Internet businesses is the one with the largest consumer audience captures the majority of share. That’s why Ask and AOL get 90%+ of the revenue share from their Google agreements. But because Yahoo is in such dire straits and because Google is practically the only one that can help juice it in the very short term (i.e. appease public market investors), they are at the mercy of the ‘plex. If I were Google, I would refuse to deal with Yahoo this year and then take a front seat and watch the stock erode in value in 2008 and then jump in and gobble up the company (even at $30 a share). Then immediately make that price work by migrating everything on to Google’s ad platform.
