Yahoo! Moving Beyond Ad Sales

Internet portal Yahoo! is moving aggressively to overcome relatively flat ad
sales, and is making one move after another to broaden its revenue base, even
offering premium real-time services in its financial area such as the
recently launched MarketTracker.

And clearly the moves are needed in light of the slowdown in Internet ad
spending. In fact, earlier this week Goldman Sachs told clients that Yahoo! displayed “relatively flat growth” in traditional advertiser
activity for the month of May.

In April Yahoo! launched a fee-based package for investors featuring
real-time market information streamed live to their desktops with the new
Yahoo! Finance MarketTracker. The real-time information will also be
available to subscribers throughout the Yahoo! network.

The offer includes a combination of unlimited real-time quotes from the New
York, American and Nasdaq stock exchanges, breaking news from leading
editorial companies and market analysis including live stock upgrades and
downgrades, and is available for $9.95 a month.

Then there was the recent deal
for premium content
with Consumer Reports and before that was the launch of an enhanced version of the Yahoo! Messenger service that allows users
to make reduced-rate international telephone calls from their PCs.

Santa Clara, Calif.-based Yahoo!, has been forced to diversify its income
after issuing financial guidance that warns about a slowdown in spending on ad sales.

Meanwhile, the Goldman Sachs Online Media Barometer (OMB), a consolidated
metric of the level of online media activity of traditional advertisers on
portals, marked its first decline in four months.

For Yahoo!, the moves to expand revenue options would seem be mandatory,
especially in an ad environment about which GS had this to say: “We do not
expect significant growth in the OMB index over the coming months, due to
both sluggish online usage during the summer months and the many secular and
economic impediments to the full-blown adoption of the online medium by
mainstream advertisers.

Still, Yahoo! is making progress. CBS MarketWatch reported today that the
leading Yahoo! analyst at SG Cowen said his “contacts” are indicating that
the company now “gets it” and appears more willing to work with advertisers.

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