Yahoo Says Mobile Ad Business to Take Off

Yahoo expects “exponential” growth in mobile advertising even as the overall market is only starting to emerge from its deep downturn, a top executive of the Internet media company said on Thursday.

Yahoo’s mobile advertising business, while small, has seen substantial growth, and the company is focused on boosting the number of mobile users as a way to attract more advertisers, Hilary Schneider, executive vice president of Yahoo North America, said at the Reuters Global Media Summit in New York.

“We’re focused on it as a priority every day,” Schneider said.

“If you just look at the growth rates on mobile, they’re incredible, they’re extraordinary, but you have to just remember that they’re starting with a small base,” she said. “I really do believe that over the next five years you’ll start to see material dollars begin to migrate.”

Schneider said a complicating factor is the large number of mobile devices, formats, networks and standards.

Yahoo is seeking to revive its growth under the leadership of Chief Executive Carol Bartz, who took the reins in January and announced a controversial deal to hand off operation of its Internet search technology to Microsoft Corp in July.

In the overall U.S. ad market, Schneider said the bottom is in the rear-view mirror.

“While we can’t predict exactly the rate at which the economy will move forward, we do feel like the significant headwinds are behind us,” she said. “We do feel confident that we have seen the bottom and that’s behind us.”

Schneider defended Yahoo’s No. 2 position in the search market behind Google, saying internal company surveys show Yahoo holding or gaining share.

However, figures from independent research firm comScore show Yahoo losing share in recent months to Microsoft. Analysts said such losses could result in a smaller piece of the revenue for Yahoo in the Microsoft (NASDAQ: YHOO) partnership.

“What I would say is, we absolutely are focused on how we maintain our search query volume,” said Schneider, who joined Yahoo in 2006 and is responsible for North American business, including ad sales, partnerships and programming.