October 20, 2009

Yahoo! Beats the Street with Big Boost in Third Quarter Profit

Yahoo! released their third quarter earnings today and their profit is up, way up. Net income was $186 million, up a whopping 244% from the third quarter of 2008, when net income was $54 million. Much of this can be attributed to cost-cutting, as revenue was down year-over-year. Yahoo! brought in $1.6 billion in 3Q 2009, down 12% from 2008's $1.8 billion. Still, revenue was up over the second quarter of 2009, a good sign for the Sunnyvale-based internet company.

"With revenue coming in above our guidance and flat sequentially, we had a solid third quarter that signals our major businesses have stabilized," said Yahoo! chief executive officer Carol Bartz. "With new products like Yahoo! homepage, our brand revitalization campaign and expansion in the Middle East through Maktoob.com, our execution is improving and we're focused on what we do best - being the center of people's online lives."

Analysts predicted Yahoo! would come in at $1.12 billion net revenue and 7 cents a share earnings. But Yahoo! beat those estimates, coming in at $1.13 net revenue and 13 cents a share earnings.

You can read the full earnings release here (PDF).

Posted by Nathania Johnson at 4:23 PM | Permalink | Comments (2)

April 29, 2009

Yahoo Fires Them On The Road, Hundreds Get Axe Today

Looks like no one can hide from the Yahoo axe today. Last week it was going to be 700, today the number is 600 - but people are being aggressively laid off - apparently even employees on the road are getting notification of termination, according to Silicon Alley Insider.

Morale must be low over at Yahoo right now, especially after CEO Carol Bartz stated, ""You have three people telling project engineers what to do, and nobody's fucking doing anything," during an analyst earnings call last week, CNN Money reported.

Stock prices have risen about 4% today - similar to the reaction to the layoff announcement last week. Sad if layoff notifications are the only time the stock gets spikes.

Posted by Frank Watson at 1:11 PM | Permalink | Comments (2)

April 21, 2009

Yahoo!'s Revenues (Including Search-Based) Decline in Q1 2009; Layoffs Planned

Yahoo! today announced first quarter 2009 results that were not so bright. First of all, their revenues have declined 13% over the first quarter of 2008 to $1.58 billion. Search was dragged down with the overall decline, with a 3% decrease. Display advertising saw a 13% drop. In the first quarter of 2009, search had been a bright spot in otherwise dim earnings.

As a result, Yahoo! plans to cut 5% of its workforce over the coming two weeks.

"Yahoo! is not immune to the ongoing economic downturn, but careful cost management in the first quarter allowed our operating cash flow to come in near the high end of our outlook range," said Yahoo! chief executive officer Carol Bartz. "While we experienced pressure in both display and search advertising in the first quarter, we believe Yahoo! remains one of the most compelling advertising buys on the Internet. With our leading audience properties, substantial reach and innovative advertising solutions, we are confident Yahoo! will be well positioned when online brand advertising resumes its growth."

AdGooroo recently released data showing that first page advertisers on Yahoo! grew by 10% in the first quarter, but apparently that wasn't enough to stop the decline.

Posted by Nathania Johnson at 5:43 PM | Permalink | Comments (0)

January 28, 2009

Search a Bright Spot for Yahoo, too

Last week, Microsoft reported earnings, and announced that even amid job cuts in other areas, the company would continue to add jobs in its search business.

Tuesday, Yahoo reported earnings for Q4 and 2008, and again search was noted as a bright spot in otherwise weak quarter.

Search revenue for "owned & operated" sites came in at $436 million, up 11 percent year-over-year. U.S. search revenues were up about 17 percent. Query volume was up 10 percent, while revenue per search grew in the “mid-single digits."

The company reported overall revenue of $1.8 billion in Q4 2008, a 1 percent drop compared to Q4 2007. Marketing services revenue totaled $1.6 billion in Q4. Yahoo also reported full year results; revenue totaled $7.2 billion in 2008, up 3 percent over 2007.

During the quarter, Yahoo incurred $108 million in restructuring costs, a $488 million write-down of its international business, and $7 million in legal and advisory fees related to the proposed Microsoft and Google deals. Not counting those charges, Yahoo would have met analyst expectations with $238 million in net income, or $0.17 per share. That's up from $184 million, or $0.13 per share, for Q4 2007. With those charges, Yahoo reported a net loss of $303 million, or $0.22 per share.

During the call, new Yahoo CEO Carol Bartz assured analysts she was not hired to sell the company, that she h"didn’t arrive with preconceived notions about anything," in regards to selling the search business, although "everything's on the table."

“Whether we keep it or sell it, search is important to this company and it’s important to build it up,” Bartz said.

Posted by Kevin Newcomb at 10:16 AM | Permalink | Comments (0)

January 23, 2009

Yahoo! to Announce Q4 2008 Earnings Next Tuesday, January 27

Yahoo! will announce their fourth quarter 2008 earnings next Tuesday, January 27 at 5pm EST/2pm PST. Will Yahoo!'s report be similar to yesterday's Google and Microsoft earnings?

Google and Microsoft's ads were a bright spot in their earnings calls. Even though Google beat the Street, the profit saw a big drop in a year marked by a tough economy. But Google still saw increases in paid search. Microsoft's profits were also nothing to write home about, but search revenue experienced double-digit growth.

Like pretty much every company out there, Yahoo will have bad news to report. Let's face it, 2008 was not there best year (big understatement). But the news has the opportunity to be offset by a fresh tone set by brand spankin' new CEO Carol Bartz.

Posted by Nathania Johnson at 9:19 AM | Permalink | Comments (1)

May 26, 2008

Is Yahoo Gouging For Domain Registrations?

A thread over at WebmasterWorld has reported that Yahoo will be increasing its charges for domain registration as of July 1, 2008 to $34.95. Now I have not heard that the major domain registries have increased prices so is this another way Yahoo thinks it can help increase revenue?

Most companies charge about a third of the new price so it looks like Yahoo will be losing a lot of that business. Guess the ones left will pay extra and Yahoo can cut back on staff.

This is not a smart move given all that is happening right now. Almost looks like they don't want to do it any more and figure to just boost the prices to a level where everyone leaves.

The price seems to include a starter hosting package. Curious would this have a spill over effect on visitor counts to Yahoo? Does it force sites to include Yahoo links or advertising?

I know gas prices are increasing a lot of goods and services but there is no gas needed to do this service.

Yahoo may want to reconsider this move. Sounds like desperate measures.

Posted by Frank Watson at 1:46 PM | Permalink | Comments (4)

March 18, 2008

Yahoo Shows Microsoft, Wall Street What Its Really Worth

Yahoo has filed an investor presentation which projects its operating cash flow to increase from $1.9 billion to $3.7 billion over the next 3 years. An estimated $8.8 billion (excluding the cost of acquiring all of this traffic) is expected as a result.

Basically, Yahoo is saying "Hey, Microsoft, we're worth far more than the paltry $44 billion you offered us." But if you really want the corporate speak here it is:

"Yahoo! is positioned for accelerated financial growth – we have a powerful consumer brand, a huge global audience and a highly profitable operating model," said Jerry Yang, the Company's co-founder and chief executive officer. "With industry-leading tools, technology, people and platforms, Yahoo! is poised to capture growth in display advertising where we believe growth will be greatest. Combined with our recent progress in search monetization, Yahoo! is well positioned to provide the broadest range of products to our advertisers while delivering the most compelling experiences to users."

The numbers are in line with other reports suggesting that search and online advertising is expected to continue growing over the coming years and that search spending is growing despite the gloom and doom in the economy-at-large. However, many analysts see Google taking a big land grab on the growth – not Yahoo.

Yahoo's stock rose today in the wake of the report, though it may be receiving a boost from anticipation over another Fed rate cut and Q1 banking reports coming in higher than expected, just one day after Bear Stearns incurred a major freefall and took the broader market along for the ride. Yahoo trailed the overall gains in the NASDAQ market at the time of this report.

Posted by Nathania Johnson at 10:25 AM | Permalink

January 30, 2008

Yahoo Strategy from the Yahoo Magic 8 Ball?

Yahoo's Yodel Turns Into a Whimper. That's how BusinessWeek described the Yahoo earnings call. In his NY Times Tech blog, Saul Hansell savaged Yahoo execs on the conference call for not articulating a strategy, obfuscation, and excessive use of jargon.

I disagree, so we'll let our search industry readers decide for themselves.

Here are the 5 most important questions Wall St. analysts asked and Yahoo executives answered about Search, excerpted courtesy of SeekingAlpha.com, where you read the full transcript of Yahoo's earnings call and tomorrow's Google earnings call (January 31).

Judge the answers for yourself. There are golden nuggets you'll be able to use when developing your search engine strategies.

Brian Pitz, Banc of America: Would you comment on whether you continue to see click-through rate improvements from Panama accelerating since Q3?

Susan Decker, President, Yahoo: Brian, the click-through rate improvements have been the primary driver of the RPS (revenue per search) gains, as we have said in the past. We don't get too specific on all the components, but I did mention that in Q4 a couple of initiatives that will help advertiser ROI actually may have limited our gains and were deliberate moves against coverage. We have seen continued improvement in click-through rates and as I mentioned, the RPS gains in Q4 were pretty consistent with what we saw in the prior two quarters of close to 20%.

Mark Mahaney, Citigroup: You (Susan Decker) made some comments about some macroeconomic uncertainty. What kind of impact in a hard recessionary environment do you think you could see in your display and search advertising, whether one would be more insulated than the other? Specifically in Search, to the extent that you were to see a major negative macroeconomic impact, do you think you would see that more in terms of advertiser demand or a change in user or searcher behavior?

SD: Just going back to some of the comments I made in my script, we have, from time to time, seen pockets of weakness and certainly a couple of pockets in the fourth quarter as I outlined. We've also had areas of strength that have been offsetting.

The challenge in answering your question is clearly the secular trends in online advertising have historically, and even today, very much been overwhelming the cyclical environment. It's early to tell though if the weakness in the housing and financial and travel sectors -- a little bit in retail -- will start to affect the consumer more broadly and the advertiser more broadly and therefore searches in terms of what kind of commercial searches happen.

I don't think we have a crystal ball in that, but we are encouraged, actually, by how much offsetting strength we've seen in some of the other categories which has kept our overall marketing services growth rate in line in display and Search with what we saw earlier in the third quarter, or actually even a little bit better.

Jason Helfstein, CIBC World Markets: Can you give us some color on the affiliate weakness? How much of that was pricing versus volume? What was headcount at the end of the quarter?

Blake Jorgensen, Yahoo CFO: On the headcount front we didn't disclose headcount in this conversation but it is roughly 14,300. As a reminder, we closed two acquisitions during the fourth quarter that added approximately 200 heads to that group.

SD: On the affiliate -- this is Search affiliate, just to be clear on that -- the overwhelming majority of it is price. I said in my comments that the TAC (traffic acquisition cost) rate for the last two years really looking at 2006 to what is implied in our projections for ‘08 has gone from 72% to about 80% on TAC-attributable revenue and that excludes the Yahoo! Japan deal which has been restructured. …In terms of volume, the only real volume changes have been some traffic quality partners and really not much else.

Justin Post, Merrill Lynch: On query volume, I know market share has been an issue for The Street. Can you talk about how your query volume growth has trended both U.S. and internationally over the last three or four quarters?

SD: On the Search side we talked about our overall revenue being up about 30% plus in Q4 and RPS being up about 20%. You can do the math, but the implied query growth is up about 10% double-digits.

Business Week asked search marketing firms for commentary on Yahoo's dilemma: Didit Executive Chairman Kevin Lee, was quoted as saying, "We give them every dollar we can but if they don't have the traffic, there's nothing for us to spend the money on."

That's the general sentiment of the SEMs managing paid search campaigns. Everyone's rooting for Yahoo, MSN adCenter, even Ask to win back share from Google.

Ellen Siminoff, CEO of Efficient Frontier (whose search spending study was detailed by ClickZ yesterday) noted Yahoo can't cut its way to prosperity and shared an astounding statistic: overall search ad spending on Yahoo by Efficient Frontier clients fell 3.8 percent in Q4 y/y while Google's share of search ad spending rose to 76.6 percent from 70.5 percent last year.

Posted by Kevin Heisler at 7:21 PM | Permalink

March 21, 2007

Minus Expenses Yahoo, Google Ad Revenues Similar

While it is well known Google has higher search market share, recent analysis of profits show Yahoo's ad revenue is a lot closer than the market share would suggest.

Jupiter Research blogger David Card reports thast Google has 17 percent of online ad revenue to Yahoo's 16 percent.

These numbers are of what the comapny keeps after expenses.... could be the YouTube deal is holding down those numbers... or as some are suggesting Yahoo keeps more of the money - they pay less to their search partners... though from what I have seen Yahoo pays more, but has lower click through rates...

Posted by Frank Watson at 9:55 AM | Permalink

February 22, 2007

Yahoo Launching Separate Content Advertising Platform

Update: Yahoo emailed me to say this is only being offered in Europe right now.

Yahoo is launching a separate content platform, according to the email I received earlier today.

The email states:

In the next coming months, Yahoo! Search Marketing will introduce a new serving platform for Content Match. This new platform is designed to improve listing relevance, power the Yahoo! Search Marketing Distribution Network, and improve the end-user experience.

The new Content Match platform includes an improved matching algorithm and real-time optimization that, in addition to bid, will consider additional relevancy factors like keywords, title and description to determine your listing position.

Posted by Frank Watson at 1:17 PM | Permalink

November 21, 2006

Can Developers & API Save Yahoo From Its Peanut Butter Crisis

Danny reported yesterday on the internal Yahoo memo that called for Yahoo to make cut backs due to them spreading out the Yahoo resources like peanut butter. In reaction to that Jeremy Zawodny of Yahoo wrote Yahoo's Peanut Butter APIs which is strongly supported by News.com's Yahoo seeks geek credibility. Jeremy argues that APIs are part of the solution to the problem of being "everything to everyone." The News.com article explains that this is part of Yahoo's appeal. I tend to agree with Jeremy's argument, but as he said, "Brad is very right about some things and terribly wrong about others." It is also important to note, as Danny IMed me, "Hey Yahoo! Microsoft Is Jelly To Your Peanut Butter. Make A Sandwich!" More details on that here.

Posted by Barry Schwartz at 9:15 AM | Permalink

November 20, 2006

Yahoo Exec Releases Jerry Maguire-Style Reform Memo

Over the weekend, an email from Yahoo senior vice president Brad Garlinghouse was released by the Wall Street Journal covering how Garlinghouse fears Yahoo's resources are spread too thinly (like peanut butter on a sandwich) and that massive reforms, along with firings, are needed. Some excerpts:

I proudly bleed purple and, yellow everyday! And like so many people here, I love this company

But all is not well. Last Thursday's NY Times article was a blessing in the disguise of a painful public flogging. While it lacked accurate details, its conclusions rang true, and thus was a much needed wake up call. But also a call to action. A clear statement with which I, and far too many Yahoo's, agreed. And thankfully a reminder. A reminder that the measure of any person is not in how many times he or she falls down - but rather the spirit and resolve used to get back up. The same is now true of our Company.

It's time for us to get back up....

We lack a focused, cohesive vision for our company. We want to do everything and be everything -- to everyone. We've known this for years, talk about it incessantly, but do nothing to fundamentally address it. We are scared to be left out. We are reactive instead of charting an unwavering course. We are separated into silos that far too frequently don't talk to each other. And when we do talk, it isn't to collaborate on a clearly focused strategy, but rather to argue and fight about ownership, strategies and tactics.

Our inclination and proclivity to repeatedly hire leaders from outside the company results in disparate visions of what winning looks like -- rather than a leadership team rallying around a single cohesive strategy.

I've heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular.

I hate peanut butter. We all should....

We lack clarity of ownership and accountability. The most painful manifestation of this is the massive redundancy that exists throughout the organization. We now operate in an organizational structure -- admittedly created with the best of intentions -- that has become overly bureaucratic. For far too many employees, there is another person with dramatically similar and overlapping responsibilities. This slows us down and burdens the company with unnecessary costs.

Equally problematic, at what point in the organization does someone really OWN the success of their product or service or feature? Product, marketing, engineering, corporate strategy, financial operations... there are so many people in charge (or believe that they are in charge) that it's not clear if anyone is in charge. This forces decisions to be pushed up - rather than down. It forces decisions by committee or consensus and discourages the innovators from breaking the mold... thinking outside the box....

We lack decisiveness. Combine a lack of focus with unclear ownership, and the result is that decisions are either not made or are made when it is already too late. Without a clear and focused vision, and without complete clarity of ownership, we lack a macro perspective to guide our decisions and visibility into who should make those decisions. We are repeatedly stymied by challenging and hairy decisions. We are held hostage by our analysis paralysis.

We end up with competing (or redundant) initiatives and synergistic opportunities living in the different silos of our company.

• YME vs. Musicmatch

• Flickr vs. Photos

• YMG video vs. Search video

• Deli.cio.us vs. myweb....

We have lost our passion to win. Far too many employees are "phoning" it in, lacking the passion and commitment to be a part of the solution. We sit idly by while -- at all levels -- employees are enabled to "hang around". Where is the accountability? Moreover, our compensation systems don't align to our overall success. Weak performers that have been around for years are rewarded. And many of our top performers aren't adequately recognized for their efforts.

As a result, the employees that we really need to stay (leaders, risk-takers, innovators, passionate) become discouraged and leave. Unfortunately many who opt to stay are not the ones who will lead us through the dramatic change that is needed....

There are three pillars to my plan:

1. Focus the vision.

2. Restore accountability and clarity of ownership.

3. Execute a radical reorganization....

1. Focus the vision

a) We need to boldly and definitively declare what we are and what we are not.

b) We need to exit (sell?) non core businesses and eliminate duplicative projects and businesses....

2. Restore accountability and clarity of ownership

a) Existing business owners must be held accountable for where we find ourselves today -- heads must roll,

b) We must thoughtfully create senior roles that have holistic accountability for a particular line of business (a variant of a GM structure that will work with Yahoo!'s new focus)

c) We must redesign our performance and incentive systems....

3. Execute a radical reorganization

a) The current business unit structure must go away.

b) We must dramatically decentralize and eliminate as much of the matrix as possible.

c) We must reduce our headcount by 15-20%.

Posted by Danny Sullivan at 7:31 AM | Permalink

October 23, 2006

Yahoo Japan's Profit & Sales Grow 20+ Percent

Market Watch reports that Yahoo Japan's net profit rose 22-percent in Q3 of this year. Net sales rose 36% to 21.20 billion yen from the previous quarter. Projected net profit is between 13.65 billion yen and 15.20 billion yen in the fiscal quarter through December.

Posted by Barry Schwartz at 9:38 AM | Permalink

October 18, 2006

Google To Own 25% Of 2006 Online Ad Revenue

An eMarketer.com report estimates that Google will account for twenty-five percent of all online ad revenue. Google's share continues to increase (65% increase YoY) while Yahoo's growth continues to decrease, eMarketer says. Google first surpassed Yahoo in ad revenue back in 2005, but barely. Google in 2006 is expected to earn over $4 billion in ad revenue but Yahoo has just $2.9 billion according to eMarketer.com.

Posted by Barry Schwartz at 9:24 AM | Permalink

A Look At Yahoo's 3rd Quarter 2006 Earnings

Yahoo announced 3rd quarter earnings yesterday, so I figured I share with you some highlights from the announcement. The main quote being pulled out was Terry Semel's, "While we're very excited about a number of things happening at Yahoo, I am not satisfied with our third quarter financial performance," line. That along with falling $1.14 billion short of Wall Streets expectations in revenues earned and a drop in net income by 37.5 percent, has sent Yahoo's stock downwards again. One highlight is that Yahoo finally released Panama. If you want a full written transcript of the conference call, you can view it at SeekingAlpha.com. There is more coverage of Yahoo's earnings at ClickZ, NY Times, AP, PaidContent.org, Washington Post, and Wall Street Journal.

Posted by Barry Schwartz at 8:46 AM | Permalink

October 17, 2006

Yahoo Reports 3rd Quarter 2006 Earnings

Yahoo just posted their earnings report for the third quarter of 2006. You can download the report as a PDF from Yahoo's site here. I did not read it yet, but I wanted to post the link to the release.

Posted by Barry Schwartz at 5:07 PM | Permalink

October 13, 2006

Yahoo To Hold 3rd Quarter Earnings Conference Call 10/17

Yahoo will hold their third-quarter earnings conference call on Tuesday, October 17, 2006 at 2:00 PM PT / 5:00 PM ET. The live Webcast of Yahoo's Q3 2006 earnings conference call can be accessed here. The Webcast will be archived within 24 hours of the end of the call and will be available through the same link above.

Posted by Barry Schwartz at 11:13 AM | Permalink

October 12, 2006

Bug Leaves Advertisers Unable To Change Ads On Yahoo

As I reported at reported at Search Engine Roundtable twice already, Yahoo has left their search advertising customers out to dry.

Advertisers and agencies are reporting they are unable to properly manage their accounts due to a 3+ day old bug in the Yahoo Search Marketing system.

Email responses back to Yahoo customers state that Yahoo is aware of the problem but have "no estimated date or time frame for the issue to be resolved."

One person emailed Search Engine Watch saying, "Users are unable to view the remaining balance in their accounts, nor are we able to modify or add listings."

Some of the Yahoo reps have been instructing clients to email them so that they can make the necessary changes for them. Just nuts! This must be something very serious for them to not be able to revert back to a previous coding state.

Having the same issue and want to discuss? Join our Search Engine Watch Forums thread, Yahoo PPC management crash.

Postscript: Yahoo commented at our forums saying it has been fixed.

We've been experiencing some technical difficulties that were impacting the editorial tools in our search advertising UI but are happy to report that these systems are back up and running. Thanks for your patience.

Posted by Barry Schwartz at 8:16 AM | Permalink

October 11, 2006

Yahoo Hurting While Google Healthier Than Ever

The NY Times has an article named Yahoo's Growth Being Eroded by New Rivals (free version available at (IHT.com). The article goes through how Yahoo is suffering and lagging behind its competitors. (1) They made a bid at YouTube but those deals broke down, according to the article, and Google "swooped" them up. (2) The new Yahoo search ad system, Panama, is over a year delayed. This "delay has sucked up the company's engineering resources and prevented it from developing new advertising products."

Based on my coverage of Yahoo over the past year, it seems like webmasters, SEOs, and industry folks have become less and less interested with the company.

The LA Times has an article this morning that goes on the same theme. If you can't get to the article, try going through Google News to gain free access, it worked for me.

Postscript From Greg Sterling:

This is not the kind of publicity you want to see if you're on the PR team. While it's true that Google has momentum and Yahoo may need a kind of "shot in the arm," what people forget is that Yahoo is the largest site on the Internet with the most monthly uniques.

It also has a bunch of market-leading properties including mail, finance and local (among others). Mail is also the number one mobile site.

Google, though a very dynamic and powerful company with lots of momentum, is not without its challenges and vulnerabilities. If anything the YouTube acquisition was an admission of some of those. Though, by the same token, Google now has great opportunity with YouTube.

I'm not sure, from where I sit, how many problems identified in the Saul Hansell Times piece are real and how many are simply perceived. But perception does influence reality.

Yahoo is a little like a strong sports team that happens to be in a bit of a slump right now.

Posted by Barry Schwartz at 9:40 AM | Permalink

September 19, 2006

Yahoo CEO Says Ad Growth Slowing Down; Ask.com To Increase Market Share

The Wall Street Journal reports that Terry Semel, Yahoo's CEO, has warned that online advertising growth will be slowing in automotive and financial services industries. He said that there is still growth, but "but they're not growing as quickly as we might have hoped at this point in time," Semel said. On that news, Yahoo's shared dropped $3.47, or 12%, to $25.54.

Barry Diller, CEO of IAC, said he can see Ask.com gaining market share, about 8 to 10 percent share. More details on that story at Reuters.com.

Postscript From Danny: See my follow-up post, Again, The Need For Search Ad Revenue To Stand Alone.

Posted by Barry Schwartz at 12:21 PM | Permalink

August 17, 2006

Former Yahoo China Head Sues Yahoo For Defamation

Reuters reports that Zhou Hongyi, the former head of Yahoo China, has sued Yahoo for defamation. Yahoo said they were about to sue Zhou Hongyi for "unethical business practices." Hongyi has a 40 percent stake in Alibaba.com, which was bought by Yahoo for $1 billion last year. To me, it seems like from the article, that Yahoo finds Hongyi to be a shady character, and Hongyi doesn't like Yahoo telling the public how they feel about him.

Posted by Barry Schwartz at 9:20 AM | Permalink

July 24, 2006

Google Versus Yahoo: Consistency Or Wow In Product Development?

An article over at the New York Times 'In the race with Google, it's consistency vs 'wow'' discusses the differing approaches of Google and Yahoo to the introduction of new technology and resources. The fact that Google hasn't added some of the basics to its mapping service in comparison to the Yahoo and AOL offerings is the starting point for an indepth discussion on how both engines (MSN, AOL and Ask get very short shrift) are trying to increase their user base.

Alan Eustace (Senior VP at Google for engineering and research) is quoted as saying "We are trying to come up with something that is new and different, that makes people say ?Wow.? " Yahoo on the other hand is taking a rather different approach of ensuring that their services are predictable and consistent.

Although the article doesn't use the analogy it does remind me very much of the tortoise and the hare story, with Google of course being the hare, bouncing along, playing to the audience, not really looking where he's going, but getting there very quickly. The Yahoo tortoise carefully places one foot in front of the other, and it isn't very exciting, but you know where you'll be with it.

Is one approach better than the other? Clearly there are examples that can be drawn from both camps; the speed of Google mapping with its click and drag approach certainly did draw 'wow' responses. 'Wow' is exciting - it gives bloggers something to write about, teachers something new to teach and industry commentators something to talk about on the conference podium. On the other hand consistency is rather dull, but ultimately important if you want to provide a raft of integrated services.

I'm as guilty as the rest - when demonstrating features from search engines I like to demonstrate all the 'wow' functionality, and the delegates love it and enjoy playing with it. But at the end of the day, when it comes to answering quiz questions they tend to go for the resources and functions that work, and that they can rely on.

What I'd like to see is a situation where I can look at a search engine, with all of its offerings, search syntax, extra resources and so on and go 'Wow - all this stuff works well together, and it's really exciting', but perhaps that's asking too much?

Posted by Phil Bradley at 12:36 PM | Permalink

July 19, 2006

Yahoo's Stock Falls On Panama Delay & Q2 Earnings Release

Everyone is blaming the fall in Yahoo's stock price due to the delayed launch of Panama, Yahoo's new ad system. We have USA Today reporting about a record second quarter revenue that still didn't help Yahoo's stock price. Bloomberg reports that Yahoo shares "had their biggest drop in more than four years" and how earnings fell just short of analyst projections. CNN has a catchy "No yodeling for Yahoo investors" headline for its report. The Wall Street Journal and Reuters explain that Yahoo's numbers met expectations but that the delayed launch caused concern that Microsoft can catch up with Yahoo in the sponsored search game.

Posted by Barry Schwartz at 8:31 AM | Permalink

June 29, 2006

Google Knocks Off Apple On The Wired 40

The Wired 40 was just released and Google has secured the top spot, at number one this year. They have bumped off Apple, who last year ranked number one. Wired commented on Google with the following;

Less cuddly but more profitable than ever, the monster from Mountain View has rivals but no peers. Is it a search engine? A media company? A software provider? Who cares? Microsoft, for one. Get ready for the grudge match of the decade.

Wired is a huge Apple fan and supporter, as far as I know. For them to hand over the spot to Google, says something. Note that Yahoo is on the list at a respectable number 5.

Posted by Barry Schwartz at 10:03 AM | Permalink

June 22, 2006

Google Partners With Adobe For Toolbar Distribution In Shockwave, Other Product To Be Named

Both Adobe (PDF link) and Google have announced a new deal where Adobe will distribute the Google Toolbar for Internet Explorer as part of Adobe Macromedia Shockwave Player downloads. That was supposed to begin yesterday, and bundling with other Adobe products will happen in the future.

Wait a minute? Weren't Yahoo and Adobe buddy-buddies? Yes -- a special version of the Yahoo Toolbar is built into the popular Adobe Acrobat Reader program, through a deal dating back to October 2004.

In January of this year, Google began distributing Adobe Reader as part of the Google Pack without the Yahoo Toolbar being part of it. Google told me (article for SEW members) then that the Adobe-Yahoo agreement only covered the distribution Adobe did.

So is the Yahoo-Adobe deal completely over? No. Reuters reports that Adobe says that will continue:

Adobe previously included Yahoo Inc.'s toolbar as an option with the Shockwave Player, Adobe spokeswoman Katie Juran said. Adobe still offers the Yahoo toolbar as an option for its Flash Player and Adobe Reader products, she said.

I just uninstalled Acrobat Reader and downloaded a fresh copy. I definitely see the Yahoo Toolbar as part of the latest installation.

As for the Abobe-Google deal, the bundling with Google Pack wasn't based on payment, Google told me at the time. This latest deal is a financial arrangement, though exactly how much money is changing hands is not disclosed.

As for the distribution, I downloaded Shockwave and got no prompt for the Google Toolbar to be added. Of course, I already had it in Internet Explorer, and that seems to be why I didn't get a separate install. The Shockwave FAQ suggests that you should see a separate install process and that this won't happen if you have the Google Toolbar already.

That FAQ also notes that the Yahoo Toolbar, previously bundled with Shockwave, has now been dropped. In addition, it says that that third parties that distribute Shockwave do not have to bundle the Google Toolbar with those distributions.

The Google Blog post also says:

Starting today, Adobe is offering the Google Toolbar to its customers as a free download -- a great way to take Google search with you anywhere on the web.

So far, that seems to be true within Shockwave. But it's also a bit overstated. The Google Toolbar on its own is not offered anywhere on the Adobe products page, nor does a search for "google toolbar" flag any page for those who just want the toolbar on its own

The best, most specific information is part of the Shockwave FAQ that I've mentioned. There is at least a direct link to the Google Toolbar download page. But that's much different that the idea the Google Blog suggests, that people visiting Adobe might be getting a pitch for the Google Toolbar on its own. Not yet, not so far.

Postscript Barry:

I was sent a screen capture of this in action, you can view the screen capture at tcal.net.

Posted by Danny Sullivan at 6:48 AM | Permalink

June 5, 2006

Yahoo's CEO Terry Semel's Salary Adjusted To One Dollar

Bloomberg reports that Yahoo CEO Terry Semel will soon be earning a base salary of $1 per year. The rest of his income will come from a bonus and retention plan with options for nine million shares. Last year, Semel earned $600,000 as a base salary. The change to taking only $1 has him joining the "low" base salary ranks of Google's two cofounder Larry Page and Sergey Brin and CEO Eric Schmidt.

Posted by Barry Schwartz at 10:58 AM | Permalink

May 24, 2006

Yahoo's Annual Meeting Of Stockholders Tomorrow At 1PM (EST)

Yahoo is hosting the Annual Meeting Of Stockholders tomorrow at 1pm (EST). You can enroll for the meeting by clicking here and providing your email address. Once enrolled you should receive electronic delivery of the proxy statement, annual report, and related materials. More details at the Investor Events page.

Posted by Barry Schwartz at 9:34 AM | Permalink

May 17, 2006

Tim Cadogan Talking At Yahoo Analyst Day

Tim Cadogan, vice president of search, up now at Yahoo Analyst Day, talking about search monetization. He starts by saying the consumer is always first in consideration, then explains the search food chain/cycle, how questions can be answered by advertisers. Think there are billions of offers that can be delivered with more relevancy to make both sides, advertisers and searchers, happy.

Five priorities:

1. Core platform
2. Advertiser experience
3. Marketplace design
4. Consumer experience
5. Breadth and depth of advertiser experience

Priority 1

Get performance up to reduce transaction cost, which isn't just money but time and effort. Working to reduce this at a low cost. Scale, want millions of advertisers with billions of offers and 10s of billions of impressions per day. Rapid innovation, platform built to grow with new things (heard these types of things before with organic search architecture and not happened, but we'll see). Need to help ensure continued support for third parties in the search ecosystem.

Priority 2

Ease of use for advertisers, give them fast editorial turnaround. Search marketing hasn't always been easy, so spent a lot of time thinking on how to reveal the right level of sophistication when actually needed. Simple user gets simple interface; advanced gets more advanced charting and options. Effectiveness. Part of this is new ad testing to allow advertiser to express different creative for ads until get the right ad (you know, like AdWords has). Also better geotargeting.

Goal-based optimization. Everyone gets conversion tracking, so any advertiser (those who care and trust to share) can have bids optimized to reach things like cost per acquisition. Talks about "assists." How some terms get a lot of searches like digital camera and d70 will get more conversion, so advertiser might believe digital camera aren't good and so only do d70. That might be bad since digital camera might have drove or "assisted" the searcher earlier in the buying process or funnel, until they convert with a more specific term. Says this is a first to Yahoo's knowledge for the industry. I think so, if you exclude third party tools.

Shows the current system and how the new system will have a new budget system, with a bar chart showing you what opportunity you might be missing out on by not budgeting more. So helpful, but helpful to both sides.

Priority 3

New ranking system, with the first focus on improving the consumer experience. Shows a good, relevant ad for talavera tile. Doesn't show a bad example but says it happens and needs to improve.

Shows the ad quality chart. This is pretty cool -- I saw it in a briefing for the article I did two weeks ago. Shows you at a glance ads that aren't meeting the quality score. You don't know what exactly makes up that, but at least you can more easily see which ads are at risk. Clickthrough, he doesn't say, is a key component.

Priority 4

Enhanced geo-targeting, pick a city, have your ad targeted to there.

Priority 5

All small business now under one person, from domains to store functionality. On sales side, Yahoo Search Marketing and graphical sales now under one person.

Competitive stack up time. Relevancy-based ranking, ad testing, easier-to-use system, fast editorial review, integrated analytics are all key jumps up. Beyond this and above, visible quality scores, enhanced bidding and forecasting, a really easier-to-use system, good geo-targeting, the implementation of assists.

When? Platform tests through Q3 this year, then deploy in US, then Q1 next year internationally. Advertisers will also come into the new platform. The ranking system itself won't change until Q4 this year in the US, it's expected, then Q1 internationally, and designed to easy advertisers into new system.

Questions (joined by panelists):

Is there a risk bid prices might drop (me: sure, but if clicks increase...). We feel in aggregate, the net experience is going to be better. As for the analytic integration, Yahoo if I understood right does get some aggregate data to use for insight but mainly aimed at helping advertisers learn more.

Safa Rashtchy from Piper Jaffray: do you think you've got a new architecture that will let you move faster (they've said yes already but they say yes again). Also said (sorry, didn't catch name of the other panelist saying this) this is the third generation of this type of ad system, either third generation for Overture (if so, sure) or third generation in Overture-Google-Yahoo (if so, disagree. MSN is more a third generation platform, though I've written before that doesn't guarantee advertisers if there's no traffic).

Geotargeting: Tim sees lots of potential on those who don't advertiser who would once they have good local targeting. Susan Decker CFO stresses this is 1.0 of the new system and so they are considering some things down the line that their competitors might have (ie MSN and demographics).

Worried about hitting the holidays? Our advertisers say they want this sooner.

What type of increases in monetization expecting based on testing and any surprises from that. Susan: You don't really know until you have a real marketplace, and a dynamic marketplace. Don't expect a financial contribution this year from the system but more next year (ie, any big benefits won't really happen in 2006).

Posted by Danny Sullivan at 2:20 PM | Permalink

Google Adding More Jobs Than Yahoo

BusinessWeek.com reports that Google is adding more jobs than Yahoo. Google has 1,800 open positions this year, up from 800 open positions last year. Yahoo has 800 openings this year, but they have declined from last year, with 935 job openings. Google is also higher a higher percentage of employees overseas, with 51% of their job openings based outside of the U.S. Yahoo has 29% of their job openings based overseas, up 15% from last year. Yahoo still has more employees than Google, with 10,098 employees at Yahoo and 6,790 employees at Google.

Posted by Barry Schwartz at 8:59 AM | Permalink

May 10, 2006

Yahoo En Español & Telemundo.com To Merge

The Wall Street Journal reports that Yahoo En Español and Telemundo.com will be merging companies. They will be merging the staff and sharing one advertising budget. If you visit http://espanol.yahoo.com/ now, you will find both logos at the top of the page, representing each company. The reason for the merger is because the online Hispanic market is growing extremely quickly and the two companies want to take advantage of "the incredible growth of the Hispanic marketplace," today. It appears that the two companies will fold under the Yahoo umbrella.

We have been reporting on the Hispanic market growth recently. You can find out more by reading here and here.

Postscript: PaidContent.org has some more details on the merger plans.

Posted by Barry Schwartz at 8:45 AM | Permalink

May 3, 2006

Yahoo & Microsoft Have Talked Partnering, Merging

I was talking with Kevin Delaney of the Wall Street Journal on Monday about search things in general and mentioned the sense it makes for Microsoft and Yahoo to get together. Microsoft is behind with the core search technology. Yahoo's been struggling to upgrade its paid search service. Let's get these two kids together! And today in the Wall Street Journal, it turns out that there's apparently a faction at Microsoft that wants to do just that.

Via Paid Content, A Microsoft, Yahoo Tie-Up? from the Wall Street Journal has the details. Kevin and colleague Robert Guth write of there being two factions within Microsoft -- the "let's built it ourselves" group that has been in control so far and the "let's acquire" group apparently led by Microsoft senior vice president Hank Vigil.

Vigil is said to have led the failed negotiations to combine MSN with AOL. Frankly, a Yahoo deal makes more sense than that. AOL would have provided existing traffic but not solid search technology. Yahoo provides plenty of traffic, along with core search technology and a healthy, first-hand advertiser base.

What's not to love? Probably the high price of the acquisition, plus whether Yahoo -- especially cofounder Jerry Yang -- would go for it. But apparently it's plausible enough that both companies have talked informally over the past year.

The Wall Street Journal cites the hiring of Steve Berkowitz by Microsoft as perhaps being a tipping point. I'd certainly agree. Steve is the first serious outside person Microsoft has brought in for its battle in the search wars. Bringing him on was a big sign that what Microsoft has been trying to do internally hasn't been working -- and so something radical such as an Ask or Yahoo acquisition might be in order.

The big downside is that such an acquisition would give Microsoft yet another brand to confuse consumers with. After spending hundreds of millions of dollars over the years to push MSN, they've now shifted things behind making the stupid Windows Live brand their flagship. It's stupid for so many reasons. Let me bullet point two major ones:

• Most people I know don't really like the Windows brand. Heck, I'm a Windows person, fairly anti-Mac, but Windows still represents crashes and glitches to me. And this is the label you want to attach to your online services?  
• We're moving into a world where the operating system and my web-based services aren't necessarily connected. I love Outlook. I live in Outlook. But online, I might want to sync Outlook with Yahoo or Google's calendar. Forcing me to think -- overtly or indirectly through branding -- that I have to use all your products makes me want to use none of them. Let MSN operate as if it wasn't linked to your operating system or your browser and it will be a stronger service in the long run, not weaker.

So Microsoft's already coping with the confusion of two major brands. Adding in Yahoo further confuses matters, unless they perhaps make a brave, bold move and put everything behind the brand leader in the space, Yahoo.

Meanwhile, via Valleywag, Ballmer defends Microsoft's spending increase from the Seattle Times covers a likely leaked memo from Microsoft CEO Steve Ballmer naming Google as one of the company's chief competitors and requiring further "heavy investments" in search. The goal, which we've heard before, is to create "the web's largest advertising network, giving us an engine that twill enable us to monetize our services and compete against Google."

Ah -- but to compete against Google, you don't need an advertising network. You first need a quality core web search engine, which your heavy investment to date has failed to create. And so back to Yahoo, which has exactly what Microsoft needs, that core technology.

Microsoft's AdCenter May Fail to Topple Google From Dominance from Bloomberg covers how advertisers are getting a more formal look at the MSN adCenter service that Microsoft has rolled out over the past few months. Unlike Microsoft's failure in web search, I'd say adCenter is a big success. The service already has plenty of advertisers using it -- and anecdotally continues to draw lots of praise for its features.

Features ultimately mean little, of course. As the story cites, it's about volume. MSN could have rolled out a terrible product that advertisers would have coped with simply because it was the only way to reach MSN's substantial traffic. But to the company's credit, they did not do that. Instead, they've continued to refine and tweak and take advertiser feedback in a way that has earned them raves I rarely hear recently about the systems at Google or Yahoo. Volume remains key, but the features and wooing still certainly help.

And that brings us back to Yahoo, which has been struggling with an antiquated paid listings toolset. The Counterattack On Google from BusinessWeek covers how Yahoo's "Panama" update to its paid listings system has been progressing over the past two years and is nearing completion. But BusinessWeek correctly summarizes, in my view, the changes are more about bringing Yahoo up to Google's level of features rather than leapfrogging past Google and into features like MSN offers.

It's another argument that makes the idea of Yahoo and Microsoft getting together not wacky at all.

Want to comment or discuss? Visit our Search Engine Watch Forums thread, Yahoo & Microsoft To Combine.

Posted by Danny Sullivan at 9:00 AM | Permalink

April 19, 2006

Revenues Up, Profits Down But Yahoo Meets Earnings Expectations

Yahoo reported a 22 percent drop in first quarter profits but met the expected earnings forecast. Yahoo profit slumps 22% in quarter from the New York Times has more details on yesterday's earnings call. Search and branding advertising revenue (sadly, they get lumped together) rose 35 percent.

Yahoo also said it had a 15 to 20 percent gain in search queries in the quarter, to counter stats from comScore showing Yahoo is losing share. There's some spin here I'll explore more later this week, when I do my stats review.

The short answer is this. Query growth is up across the board, comScore says. So sure, Yahoo will have a gain in NUMBER of queries. But the share of overall queries, according to comScore, has dropped. If that share had stayed steady, then query growth would have been even more.

Note that in a fast look I did at the latest NetRatings figures (older ones here), Yahoo's actually still looking pretty steady even in recent months. Again, I'll have more on that soon.

Some other coverage:

• Yahoo profit slides 22% Stock climbs 6% after Net company declares optimism: San Francisco Chronicle
• Yahoo results meet expectations, ads seen solid: Reuters
• 1st-quarter revenue up 34% at Yahoo, but profit falls 22%: San Jose Mercury News
• Yahoo profit drops, matches forecasts: MarketWatch
• Yahoo! Makes Numbers, Reveals Search, Streaming Plans: ClickZ

Posted by Danny Sullivan at 10:21 AM | Permalink

April 17, 2006

Yahoo Executives Exercise Almost $300 Million Shares In 2005

Reuters reports, as does the Wall Street Journal (subscription required), that Yahoo executives have exercised almost $300 million in stock options in 2005. Terry Semel, Yahoo's CEO earned $173.6 million in 2005 by selling off around 7 million shares. He has a remaining $236.1 million worth of unexercised options. CTO, Farzad Nazem sold off 1.8 million shares netting $63.8 million. Susan Decker earned $30.9 million by selling about one million options. And Yahoo's COO, Daniel Rosensweig netted $25.6 million by exercising 912,000 options.

Posted by Barry Schwartz at 8:59 AM | Permalink

March 15, 2006

Yahoo Grants 1.3 Million Options to CEO, Terry Semel

MarketWatch reports that Terry Semel, the CEO of Yahoo, has been granted 1.3 million stock options from his company. The options have an "exercise price" of $40.68, which is about $10 above Tuesday's closing price of $30.99. These options are set to expire March 10, 2013. Semel was also granted 7.2 million options in 2004, according to the San Jose Business Journal.

Posted by Barry Schwartz at 1:27 PM | Permalink

January 25, 2006

Yahoo Does Want To Be The Leading Search Engine

Are you kidding?! at the Yahoo Search Blog has Yahoo giving the official word that they do want to be the leader in search:

We thought it made sense to briefly recap how focused we are in search and our passion to be the world's leading search engine

The post goes on to talk about the technology Yahoo's acquired and built, the smart group of people they have behind that (and they are smart), ways Yahoo's trying to innovate especially in the social space and how Yahoo's reaching out to developers.

The post was sparked after much commentary erupted following the news that Yahoo's CFO Susan Decker was quoted as saying the company didn't have as a goal to be number one in internet search.

Some pushback came that Decker's quote was somehow taken out of context. I disagree. Let's look at it again:

"We don't think it's reasonable to assume we're going to gain a lot of share from Google," Chief Financial Officer Susan Decker said in an interview. "It's not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share."

I thought the context was perfectly clear. Yahoo doesn't expect to take market share away from Google. As I wrote in my piece yesterday, that's not the same as saying they don't want to be number one in search quality, that they don't care about search or had given up on search. It was actually a fairly honest assessment, aimed at investing types that Yahoo isn't advising that they are going to pull many people away from their Google habit.

In other words, get off our backs about the comScore/NetRatings/Hitwise whatever stats you just got sent. They aren't going to change much (nor as I posted yesterday, have they).

Perhaps Decker went on further in the interview to talk more about Yahoo being committed to search in other ways. But I talked with the Bloomberg reporter for some time about the interview he'd conducted. It didn't sound like that aspect came up or was somehow cut-off from what he wrote. Importantly, the Yahoo Search Blog itself hasn't offered this up as explanation. If Decker or Yahoo felt the comments were taken out of context, that would have been in the Yahoo Search Blog post.

In short, I think Decker's comments were clear. Although they were about marketshare, that unfortunately does spill over into commitment overall, as I wrote yesterday. The commentary and discussion that erupted over the comments was warranted, though some of the headlines I saw were definitely over the top.

I was planning to do a "How About Some Love For Yahoo" post especially in reaction to comments by Yahoo's Jeremy Zawodny and Caterina Fake, both of whom are involved in the frontline battle for searchers that Yahoo's waging. These people are dedicated, involved and have no intention to be number two in anything, as you can read in their posts. And they, like others at Yahoo, are doing all the things that the Yahoo Search Blog covers and more.

Goodness knows I've been dubious about social search and tagging. But that's more from trying to stress that it's a partial solution to improving search rather than the total solution some assume. Yahoo's being extremely innovative in this area, and that's a strength. They are smart in other ways, as well. Aside from that, they are an excellent search engine overall. Heck, they won as Outstanding Search Service from us last year. I certainly don't want them aiming for number two. I want them to be challenging Google full-force, because that type of competition means both Google and Yahoo will be better.

On the front lines, I know they're battling hard. Then generals above them need to ensure they're delivering the right message to support those troops. That doesn't mean lie or be unrealistic. Don't tell the financial markets you'll steal Google's market share away. But yes, if search is a major part of your service, you really should have it as your goal to be number one in market share. You shouldn't be "very happy" to maintain what you've got. You should be happy to maintain what you have, explain it will be a tough battle to gain more, but that ultimately you'd like to see that happen in the long term.

Want to comment or discuss? Visit our Search Engine Watch Forums thread, Yahoo: We're OK Being Number Two.

Posted by Danny Sullivan at 8:57 AM | Permalink

January 24, 2006

Yahoo: Not A Goal To Overtake Google In Search Market Share

Steve Rubel points to a Bloomberg news article, Yahoo! gives up quest for search dominance, examining Yahoo CFO Susan Decker saying "It's not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share."

I talked with the story's writer, Jonathan Thaw, for the article. Jonathan was intrigued by Yahoo seeming to give up in the challenge to beat Google. Heck, I was as well.

It's important to note that Decker's talking about search market share. Yahoo may not think it possible to overtake Google in terms of actual searchers, and saying that up front lowers some expectations among investors that are expecting to see gains.

Still, if Yahoo's not expecting to overtake Google -- and it's the firm number two player -- it doesn't speak much to MSN's chances to rise.

As I said in the Bloomberg article, it still seems like you would want being number one as a goal, even if you think it may be unrealistic or one that will take a long time to achieve. Certainly saying you're number two to your employees and consumers isn't very inspiring. At least Avis put a spin on their embracing of being number two all those years ago, to say it was better for consumers because "We try harder."

Steve definitely wasn't inspired by the Yahoo news, saying he's no longer going to use Yahoo:

I have no interest in using a product that the company doesn't aspire to make best of breed. If search is no longer hip to Yahoo, then Yahoo Search is no longer hip with me.

Again, Decker did NOT say that Yahoo was uninterested in search nor that they thought they were number two in terms of quality. She was speaking about market share and how Yahoo didn't plan to overtake Google in winning users away. But point taken -- saying your goal isn't to be number one in one particular area can spill into others.

Want to comment or discuss? Visit our Search Engine Watch Forums thread, Yahoo: We're OK Being Number Two.

Posted by Danny Sullivan at 7:35 AM | Permalink

January 17, 2006

Yahoo Releases Q4 and Full Year 2005 Earnings

The complete Yahoo Q4 and Full Year 2005 Earnings news release is available here (11 page PDF).

From the news release: "In 2005, Yahoo! continued to achieve significant results by providing some of the most innovative services to our hundreds of millions of consumers and deepening both our global reach and user engagement. As we look ahead, we will continue to focus on creating the best consumer experience, finding new ways to engage our audience and delivering the best value for our advertisers." --Terry Semel, chairman and chief executive officer, Yahoo

Numbers Summary via Dow Jones Yahoo Inc. fourth-quarter profit surged 83% as advertisers continued to shift spending to the Internet, but it wasn't enough to produce a profit that lived up to lofty expectations for the Web's most heavily trafficked destination.

The Sunnyvale-based company said Tuesday that it earned $683.2 million, or 46 cents a share, during the three months ended in December. That compared with net income of $372.5 million, or 25 cents a share, at the same time in 2004.

The 2005 results included a large accounting gain triggered by a complex deal that left Yahoo with a 40% stake in Alibaba.com, China's largest e-commerce company.

If not for that gain and other items unrelated to its ongoing operations, Yahoo (YHOO) said it would have earned 16 cents a share. That figure fell a penny below the average estimate among analysts polled by Thomson Financial.

From the WSJ: Yahoo's adverting and listing-related revenue for the quarter was $1.32 million, up 39% from $942.9 million a year ago. These marketing services comprised 88% of the company's total revenue.

Revenue from premium offerings, such as broadband services bundled with high-speed Internet access, rose to $186 million, up 38% from $135 million.

Basic Numbers, Q4 2005 via News Release + Net Income Net income for the fourth quarter of 2005 was $683 million or $0.46 per diluted share compared to $373 million or $0.25 per diluted share for the same period of 2004. Adjusted net income for the fourth quarter of 2005 was $247 million or $0.16.

+ Revenues Revenues were $1,501 million for the fourth quarter of 2005, a 39 percent increase compared to $1,078 million for the same period of 2004. +++ Marketing services revenue was $1,315 million for the fourth quarter of 2005, a 39 percent increase compared to $943 million for the same period of 2004. +++ Fees revenue was $186 million for the fourth quarter of 2005, a 38 percent increase compared to $135 million for the same period of 2004. Revenues excluding traffic acquisition costs (?TAC?) were $1,068 million for the fourth quarter of 2005, a 36 percent increase compared to $785 million for the same period of 2004.

+ Segments ++ United States revenues for the fourth quarter of 2005 were $1,056 million, a 36 percent increase compared to $775 million for the same period of 2004. ++ International revenues for the fourth quarter of 2005 were $445 million, a 47 percent increase compared to $303 million for the same period of 2004. ++ United States segment operating income before depreciation and amortization for the fourth quarter of 2005 was $352 million, a 26 percent increase compared to $278 million for the same period of 2004. ++ International segment operating income before depreciation and amortization for the fourth quarter of 2005 was $107 million, a 118 percent increase compared to $49 million for the same period of 2004.

2005 Overall Net income for 2005 was $1,896 million or $1.28 per diluted share compared to $840 million or $0.58 per diluted share for 2004. Adjusted net income for 2005 was $854 million or $0.58 per diluted share compared to $525 million or $0.36 per diluted share for the same period of 2004.

Other Facts and Comments + Via the WSJ on Microsoft Moving to Its Own Advertising: Microsoft Corp.'s MSN search unit is decreasing its reliance on Yahoo's search-advertising services this year, which will reduce Yahoo's revenue by about $25 million to $50 million in the first half of 2006, said Chief Financial Officer Susan Decker.

Via the AP: "Frankly, Google has done a better job than us," Yahoo Chairman Terry Semel acknowledged during a Tuesday interview.

Semel has been promising to introduce improved advertising algorithms later this year, a pledge he reiterated Tuesday. But he stressed it will be a gradual process that's unlikely to have a significant impact on Yahoo's earnings until 2007.

Via Marketwatch.com on Yahoo Subscriber Numbers and Projections Yahoo CEO Terry Semel said on a conference call following the release that Yahoo ended 2005 with 12.6 million paying subscribers. This surpasses Yahoo's objective to attract more than 12 million paying subscribers.

Chief Financial Officer Susan Decker said on the same call that Yahoo expects to have 16 million relationships with paying users by the end of 2006.

Via IBD "We have the right people, resources and strategy to continue to take advantage of the significant opportunities ahead," he [Semel] said.

More Resources A replay of the conference call is available here. Slides used during the call are also online.

Look for a detailed written review of the conference call from 123Jump.com very soon.

Postscript: Thanks to Nielsen//NetRatings for sharing the following Yahoo advertising and traffic metrics with us.

* Yahoo's estimated advertising revenue generated through image-based ads grew 62 percent from Q4 2004 to Q4 2005, and rose 38 percent from Q3 to Q4 2005.

* Impressions for Yahoo's sponsored search links rose four percent from September to December 2005.

* Yahoo's overall traffic across its Web properties rose 9 percent to 103.5 million unique Web users from Q4 2004 to Q4 2005, reaching approximately 68 percent of the Web's active users.

I've posted these numbers and three tables with additional info here.

Posted by Gary Price at 5:20 PM | Permalink

December 1, 2005

Google Builds Anti-Microsoft War Chest, Expect Ads To Keep Booming & Yahoo The Stealth Search Warrior

Three business items I'm throwing into one post, Google explaining it has built up cash to fend of an unnamed big competitor, Google expecting online ad sales to keep booming and Yahoo as the missing third player in the Google-Microsoft battle.

Google Builds Up `Defensive War Chest' from Bloomberg looks at Google's chief financial officer George Reyes saying that Google's recent stock sale was meant to build a "war chest" to fend off attacks by an unnamed major competitor (obviously Microsoft). So what's the war chest being spent on? He didn't specify. They did say they're hiring a bunch of key workers.

Meanwhile, Google advertising sales vice president Tim Armstrong tells Reuters in Google sees advertisers devote more budget online that the good times will keep rolling along, declaring 2005 as the year online advertising has become part of traditional media budgets and expecting spending to rise next year. He touches on expansion of ads into print, which the article cites as that and other moves as "part of Google's long-term strategy to offer relevant advertising wherever possible."

Offering relevant advertising everywhere, such as is print, isn't part of Google's stated mission to organize the world's information. But you gotta pay for that war chest and all those Googlers someway.

Meanwhile, Wharton says in Yahoo's Strategy: Stay Out of Microsoft's Crosshairs? that by accident or intent, Yahoo's managing to avoid Microsoft's ire. Sure, given that it is Google rather than Yahoo's that's been seen as the wunderkind of search over the past few years.

Unfortunately, Yahoo might benefit from being in those crosshairs. Too many of the great things it does don't get enough attention, because people want a two player battle between Google and Microsoft. Yahoo is a starring player, but too often it gets cast as a supporting actor.

I've written before that in search, we're looking at a Google - Yahoo - Microsoft battle, and Microsoft remains really still in third place, as they themselves have said in the past.

Posted by Danny Sullivan at 11:21 AM | Permalink

November 17, 2005

Alibaba's Chief Vows to Beat Google in China

In a conversation with reporters, Jack Ma, the CEO of China's Alibaba (the same people who now runs Yahoo China) has, "vowed to defeat US giant Google" in the war for Chinese searchers.

"For the search engine, I think Google is very powerful. But it is not that powerful in China now," said Ma, who founded Alibaba.com in 1999 with 2,000 dollars of capital borrowed from relatives.

Asked to spell out Alibaba.com's strategy, Ma said: "We win e-Bay, buy Yahoo and stop Google. That is for fun. Competition is for fun."

He accepted that Google and Yahoo were the dominant Internet powers in Europe and the United States, but he said neither was that strong in Asia.

"I call them sharks in the ocean. We are crocodiles in the Yangtze River. If we fight in the Yangtze River, we have more chances than they have."

More comments from Mr. Ma in the AFP article: Chinese Internet star Alibaba.com vows to beat Google

Posted by Gary Price at 11:05 AM | Permalink

November 10, 2005

Yahoo China Relaunched With Pure Search Focus & New Majority Owner

Yahoo China has been acquired by Alibaba.com and relaunched as a pure search service. Here's the rundown on the changes and some reasons behind the handout, which still leaves Yahoo itself earning off the site.

Back in August, Yahoo invested $1 billion in Alibaba. That gave Yahoo a 40 percent stake in the company.

At the end of October, there was a UPI report that Alibaba bought up all the assets of Yahoo China for $1 billion. But I think that was reported backwards and working off the August announcement.

If you look at the release of the August deal, it talks of Yahoo "contributing" Yahoo China to Alibaba. So I think UPI had it wrong. This other report covers how the deal was concluded at the end of October.

Skipping ahead, via Shak's China White blog, Yahoo! China has 8 months to better Baidu or it's 'game over,' says Alibaba CEO covers the relaunch, as does Yahoo China back to search engine market found via Threadwatch.

The first article covers Alibaba feeling they've got about a year to have a chance in search in China and how the more pure search site will also focus on financial news, entertainment and sports. And political news?

I don't want to get into trouble with the government, so I don't do any political news," said Ma. China requires special certification to publish political news.

It's not all abandoning portal features, however. Email is also being kept, as that's seen as a key portal feature that can't go away.

Yahoo's Jeremy Zawodny who is in Taiwan, heard about the move from his cab driver and was surprised to see that Yahoo China has gained an MP3 search tab.

No surprise, really. China's most popular search engine, Baidu, has built its popularity on music search -- or some would say illegal downloads -- as I covered in my Google's China Situation Better Than You Might Think -- And Other China Search News post. The question really is, will the new Yahoo China feature music content but not get into the same trouble Baidu's had with music companies.

I took a fast look to see if I could find any pirated songs, but needing to log into a Yahoo China account lost me, I'm afraid. If you have to log in, I'm guessing pirated music is less likely.

Finally, doesn't it seem odd for Yahoo to be handing over Yahoo China to another company when just this week, it bought out control of Yahoo UK, Germany, France and Korea from Softbank?

Nah. I'm guessing it's a handy way for Yahoo to profit off of China but get free of all those pesky complaints that Yahoo bends to China's will on political issues. Hey, we didn't hand that email over to the Chinese government. We didn't censor those news results. We didn't filter those search results. Alibaba did -- take it up with them! Yet by owning a stake in Alibaba, Yahoo can earn money of the search business.

As a reminder, Google owns a stake in four percent stake of Baidu. That gives it a bit of a hedge in case Google China doesn't work or the entire Yahoo keeping your distance situation -- if I'm reading that situation right -- looks worthwhile to follow.

Posted by Danny Sullivan at 11:17 AM | Permalink

Yahoo No Longer Bidding for Piece of AOL

Reuters and the Wall Street Journal report that Yahoo is no longer interested in getting a piece of the AOL pie.

After we learned what their proposed deal terms were, we passed and we've never looked back," a Yahoo spokeswoman said on Thursday, confirming a report in the Wall Street Journal.

She denied that the company had made an offer for AOL but confirmed that Yahoo Chief Executive Terry Semel met with Time Warner chairman Richard Parsons in October.

The full text of that Wall Street Journal article is here. This week acccess is free to non-subscribers.

The article reports that AOL is still in talks with Microsoft and Google/Comcast.

Posted by Gary Price at 10:55 AM | Permalink

November 7, 2005

Yahoo Buying Full Ownership Of Yahoo UK, Germany, France & Korea

Yahoo buy stakes in European, Korean portals from the Associated Press covers Yahoo spending about $500 million to acquire full ownership of Yahoo sites in the UK, France, Germany and Korea. In these countries, Softbank currently holds a 30 to 33 percent share of each country-specific portal. Yahoo said the move shows the confidence it has in its international business activities. The deals are set to complete by the end of the year.

Posted by Danny Sullivan at 6:34 PM | Permalink

October 21, 2005

China Says No To Wikipedia, Dislikes Taiwan Change On Google Maps & Chinese Activist Takes Yahoo's Yang To Task For Helping Maintain "Evil System"

Wikipedia is apparently no longer accessible to those in Shanghai and other parts of China, reports say, while Boing Boing reports a Chinese activist takes Yahoo cofounder Jerry Yang to task in an open letter for turning over information about a journalist, seeing that as "helping the Communist party maintain an evil system of control over freedom of information and speech." And now that Taiwan's happy not to be a Chinese province on Google Maps, China's disappointed a the move.

Posted by Danny Sullivan at 12:35 PM | Permalink

October 18, 2005

Yahoo Releases Q3 2005 Earnings

From the news release: "Yahoo had another record quarter and continued to see solid growth across our business. We introduced a number of new and innovative products and services and continued to provide more effective means for advertisers to engage with consumers,” said Terry Semel, chairman and chief executive officer, Yahoo"

Summary via Dow Jones/Wall Street Journal Yahoo Inc.'s revenue climbed with success in online advertising and premium services, though profit was flat when compared with a large investment gain a year earlier. Yahoo, of Sunnyvale, Calif., reported net income of $253.8 million, or 17 cents a share, about even with $253.3 million, or 17 cents a share, a year earlier, when Yahoo gained $129 million from the sale of Google shares. Revenue rose 47% to $1.33 billion from $906.7 million in the year-earlier period. Analysts surveyed by Thompson First Call were looking for earnings of 14 cents a share.

Basic Numbers, Q2 2005 via News Release Slides from conference call, here. + Net Income Net income for the third quarter of 2005 was $254 million or $0.17 per diluted share (including a net impact of $16 million, or $0.01 per diluted share, related to the sales of investments). For the same period of 2004, net income was $253 million or $0.17 perdiluted share (including a net impact of $129 million, or $0.09 per share, related to the sale of an investment and an associated tax benefit).

+ Revenues Revenues were $1,330 million for the third quarter of 2005, a 47 percent increase compared to $907 million for the same period of 2004. Revenues excluding traffic acquisition costs (?TAC?) were $932 million for the third quarter of 2005, a 42 percent increase compared to $655 million for the same period of 2004

+ Segments United States revenues for the third quarter of 2005 were $923 million, a 41 percent increase from the $655 million reported for the same period of 2004. ? International revenues for the third quarter of 2005 were $407 million, a 62 percent increase from the $252 million reported for the same period of 2004. ? United States segment operating income before depreciation and amortization for the third quarter of 2005 was $306 million, a 37 percent increase from the $223 million reported for the same period of 2004. ? International segment operating income before depreciation and amortization for the third quarter of 2005 was $79 million, an 117 percent increase from the $36 million reported for the same period of 2004.

From Reuters Yahoo Inc. the world's largest Internet media company, on Tuesday reported a a flat quarterly net profit that nonetheless topped Wall Street expectations as revenue surged from search and branded ads. In a statement, the Sunnyvale, California-based company raised its outlook for revenue and operating profits for the rest of 2005 by small margins.

Via CNN/Money In a research note published following the release of Yahoo!'s results Tuesday, Piper Jaffray analyst Safa Rashtchy wrote that the quarter was "generally as expected" but that year-over-year growth in the company's marketing services division (basically its online advertising business, which includes keyword search ads in addition to banners, pop-ups and other forms of online marketing) was about 46 percent, a bit lower than the more than 50 percent growth rate that the division has posted in previous quarters.

A Few Key Quotes "Search advertising is an important priority for Yahoo." --Terry Semel, CEO

Re: Yahoo Search in Europe: "We continue to pick up market share in some of the larger countries and continue to improve the product, improve the algorithm, distributed it better, distribute toolbars." ---Dan Rosenzweig, Yahoo COO

"Local search is already material from the searcher perspective, it's a large percentage of queries." --Dan Rosenzweig, Yahoo COO

"Very strong, very healthy query gains, up double digits." --Sue Decker, Yahoo CFO

On Clickthroughs and getting better tools to advertisers: "Our plan there is to begin testing some of those initiative in the first-half of '06 with a broader rollout thereafter." --Sue Decker, Yahoo CFO

On Integration of User Generated Content, Professional Content and ROI "...Expenditures, they are not large. This is not a sprint. This is an ability for Yahoo to take the initiative position and start to evolve a whole new industry as it relates to media and media content. So, don't look for any one thing that's either going to be wildly expensive or any one thing that's going to to change the whole direction but look to a series of things, some of which will be generated by Yahoo, some of which will be be licensed and/or parterned with others as we've been doing in the past and a large portion of it will be user generated content that Yahoo will totally enable and give users an opportunity to use our tools, post them, move them around our network onto their buddy lists, or their families, or attach advertising links to it and give them the ability to create businesses if you will." --Terry Semel, CEO

Postscript: 123Jump.com offers an in-depth look at the Yahoo 3Q Call.

Posted by Gary Price at 4:57 PM | Permalink

October 16, 2005

The Top 100 Global Brands: Where Do Google and Yahoo Place?

BusinessWeek has released their ranking of the Top 100 global brands.

What's the criteria to be considered for the list: The table that follows ranks 100 global brands that have a value greater than $1 billion. The brands were selected according to two criteria. They had to be global in nature, deriving 20% or more of sales from outside their home country. There also had to be publicly available marketing and financial data on which to base the valuation.

So, where do Google and Yahoo place?

+ Google comes in at number 38 (new to the list this year) with an estimated brand value of $8.46 billion. + Yahoo appears at number 58 (up from 61 last year) with an estimated brand value of $5.25 billion from $4.54 billion in 2004 (up 16% over last year).

Other companies on the Top 100 list include: + Microsoft in 2nd position + Apple in 41st position + Amazon.com in 68th position

The Top 5 Companies on the 2005 list are:

1. Coca-Cola
2. Microsoft
3. IBM
4. GE
5. Intel

Posted by Gary Price at 9:44 PM | Permalink

September 20, 2005

BusinessWeek Looks At Yahoo Trust Issues

Further to my earlier post on Yahoo Messenger, For Yahoo, Mistrust Is Popping Up is a brand new article spotted via Slashdot from BusinessWeek covering recent hits Yahoo's taking on the installation issues front, the China censorship/privacy front and the spyware front. Yahoo says its reputation is safe. "Users can put their trust in us because that is what we're built on," Yahoo COO Daniel Rosensweig is quoted as saying. But the idea that Yahoo might perhaps pale "as rival Google Inc. holds itself up as a paragon of consumer friendliness." Many, many are no longer seeing Google as so friendly, either.

Posted by Danny Sullivan at 10:38 AM | Permalink

September 13, 2005

Yahoo Files For Two Trademarks

Yahoo recently filed with the US Patent and Trademark Office for two new trademark or to be more precise, service marks.

First, Search Engine Roundtable points to the Yahoo Moves To Trademark Y.com discussion in our Search Engine Watch Forums about Yahoo applying to trademark the term "Y.com." This filing was made on August 22, 2005. Next, three days later on August 25th, Yahoo filed to trademark/service mark an oval and exclamation point logo. You'll see an example at the top of the application.

Posted by Gary Price at 4:21 PM | Permalink

September 9, 2005

Yahoo Says It Must Follow Chinese Laws On Giving Info

Yahoo says it must abide China law from Reuters has Yahoo neither confirming or denying it provided email details that helped Chinese authorities jail a journalists, as we've covered earlier. However, the company did say that it has to operate within the laws of the countries where it operates. And spotted via Dan Gillmor, Rebecca MacKinnon notes that if Yahoo hosted its email servers outside China, it might not have comply with Chinese laws: Yahoo! e-mail in China: must be evil to be legal.

Postscript: Yahoo Founder Explains China E-Mail Move from the AP has Yahoo cofounder Jerry Yang saying at a forum in China that the demand was a "legal order" that Yahoo had to comply with.

Posted by Danny Sullivan at 12:01 PM | Permalink

September 7, 2005

Yahoo Accused Of Helping China Jail Journalist By Revealing Email Address

Rights group says Yahoo's cooperation helped China jail journalist from the Associated Press has Reporters Without Borders saying Yahoo gave the Chinese government information that helped them trace a Yahoo email address to Chinese journalist Shi Tao, who was jailed for in April for 10 years for illegally providing state secrets to foreigners. The Reporters Without Borders statement is here.

Posted by Danny Sullivan at 9:54 AM | Permalink

August 31, 2005

France To Fund European Search Engine; Replay Of Boeing-Airbus In The Search World?

Reading my copy of the Daily Telegraph today, I came across news that French President Jacques Chirac has pledged funding a new European search engine to challenge Google, Yahoo and other Anglo-Saxon search threats.

I guess Chirac sort of forgot about French-based Voila, which I believe still uses its own Francophone technology and which also apparently is number two in France. How about Seekport, the European-based search company that runs several multi-language editions? Fireball's an old favorite, a German-based service that had its own technology, though I'm not sure what it's using now. FAST is the Norwegian-based company that gave birth to AllTheWeb, now owned by Yahoo, but which still has web search technology it provides to others like Miva.

Chirac backs eurocentric search engine is the Telegraph article with a few more details. Specifically, Chicac doesn't seem to want to fund an actual web search engine. Instead, he wants to give loans so a French-German partnership between Thomas and Deutsche Telekom can build a "multimedia search engine for the internet." A Bloomberg story says the loans would be about 2 billion euros.

In short, there's plenty of search savvy in Europe that seems to have been OK without governmental support. But if the loans go ahead, it will be interesting to see if we're about to have a trade war emerge in the search space and over government backing, similar to the arguments that are made about government support given to aircraft makers Airbus in Europe and Boeing in the US.

The article has a few more details on the plans for a French-backed library digitization project, as well, as does France pushes for European books online. For past coverage on that from us, see:

• France, Google & The Need for Digitization Project Cooperation
• German Publishers Plan Major Book Digitization Project
• European Libraries Back Alternative To Google Library Project

Want to comment or discuss? Visit our forum thread, French Loans To Back European Rival To US Search Players.

Postscript: See also my later post, Hey President Chirac - French-Based Thomson Sold Off Search Technology You Now Want To Fund

Posted by Danny Sullivan at 8:56 AM | Permalink

July 19, 2005

Yahoo Announces Q2 2005 Results

Yahoo released their Q2 earnings this afternoon and the News.com article: Yahoo profit rises, but revenue falls short, has the story.

You'll find all of the numbers in this Yahoo news release (PDF). Also available is an archived copy of today's conference call along with a set of slides (PDF).

Basic Numbers, Q2 2005 (via press release and News.com)

Net Income

• For Q2, 2005 net income of $754.7 million, or 51 cents a share, excluding traffic acquisition costs. Minus $563 million from the sale of an investment, Yahoo reported 13 cents a share, in line with analyst estimates and 5 cents above last year.

Revenues

• Revenues were $1,253 million for the second quarter of 2005, a 51 percent increase compared to $832 million for the same period of 2004.
• Excluding fees paid to marketing partners, the company posted revenue of $875.1 million. Analysts had expected the company to post revenue of $882.7 million, according to a survey by Thomson Financial.

Segments

• United States revenues for the second quarter of 2005 were $870 million, a 39 percent increase from the $624 million reported for the same period of 2004.
• International revenues for the second quarter of 2005 were $383 million, an 84 percent increase from the $208 million reported for the same period of 2004.

More Numbers and Comments

• Via AP: Yahoo ended June with 181 million active registered users, a 23 percent increase from the same time last year. The audience included 10.1 million subscribers, a 58 percent increase from last year...Subscriptions accounted for $158.7 million, or 18 percent, or its second-quarter revenue, minus advertising commission.
• Via AP: Through June, Google 36.9 percent share of the U.S. [search] market, outdistancing Yahoo's 30.4 percent share, according to comScore Networks.

• Via Dow Jones: [CEO Terry Semel] said Yahoo will continue to invest in products for consumers that will encourage them to engage more deeply with the site. And it also will focus on driving more advertising revenue, in particular by reworking its search algorithms in an effort to wring more revenue from consumer Web searches and by upgrading its programs for small Web publishers.

Posted by Gary Price at 7:08 PM | Permalink

June 21, 2005

Comparing The Google & Yahoo Business Cultures

Google vs. Yahoo: Clash of cultures is similar to other stories we've seen before, looking at culture differences in how Google and Yahoo operate. In the end, the story concludes Yahoo is more in tune with Madison Avenue big brand types, while Google is more of a mega-classified ads company. Of course, the analyst saying Google's all search sounds like he buys into the "contextual is search" argument. When you're contextually delivering CPM-based graphic ads on web sites, that's hardly "all search" in my book. For those other similar stories, check out Google vs. Yahoo Story on CNBC and More on Google vs. Microsoft and The Google/Yahoo Rivalry in 2005 and Yahoo Has Google's Mojo: Round Two.

Posted by Danny Sullivan at 10:23 AM | Permalink

May 31, 2005

Yahoo CEO: 2005 Is For Making More Search Revenue & Better Ad Targeting Through Personal Info

Yahoo CEO: Better Search Monetization Is Top Co Priority from Dow Jones has Yahoo's Terry Semel saying that increasing the revenue earned per search is the company's "largest and most important project" in the search space. Now that the core search effort of 2004 is apparently considered overcome, cranking up the revenue is what the tech teams are focused on this year. Not exactly reassuring words for searchers, who might hope that the most important project remains a focus on relevancy. But, the comments did come at a conference aimed at investing types.

Meanwhile, Yahoo is going to tap into the tons of data is has about users to better target ads. If Google said something like that, pitchforks would be out, privacy advocates enraged and the question of whether Google was really secretly evil would hit the blogosphere. Yahoo said this last Thursday, and so far, nada.

Everyone, of course, is going to do more targeting of ads (and search results) based on personal data. It's even a good thing, in many ways. But it would be nice to see the industry perhaps look more at how to prepare consumers for this coming. A bit more on this in this past post, Better Search Privacy Needs Addressing Overall.

Posted by Danny Sullivan at 8:10 AM | Permalink

April 20, 2005

Behind The Scenes Of Yahoo Takes On Google

Yesterday I noted a Fortune story giving a behind-the-scenes look at Microsoft waking up to the challenge Google presented. The search engine that could from the San Jose Mercury News (reg. required) does a similar look at Yahoo getting search religion. Seeing the revenue Overture was generating from an initial partnership push got the lightbulbs going off. New CEO Terry Semel helped refocus the company, and it ultimately decided search had to be technology it owned, rather than outsourced. It touches a bit on the issue of uniting search technology from three different players -- plus the brand new rewriting Yahoo said it also did leveraging all the new talent it had purchased.

Posted by Danny Sullivan at 1:31 PM | Permalink

April 19, 2005

Yahoo Profits Double; Beats Estimates

Hot off the wire are Yahoo's Q1 2005 numbers.

+ Q1 Net Income--$204.6 million, or 14 cents a share vs. net income of $101.2 million, or 7 cents a share, in Q1 2004.

+ Revenue climbed 55% to $1.17 billion from $757.8 million in the year earlier period. Yahoo had estimated first-quarter revenue, excluding traffic costs, of $765 million to $805 million. Analysts were estimating 11 cents a share on $796.8 million in revenue.

+ Excluding traffic acquisition costs, or fees paid to partner sites to generate traffic, Yahoo's revenue was $821 million, up 49% from $550 million last year, beating the company's own forecast. Yahoo had estimated first-quarter revenue, excluding traffic costs, of $765 million to $805 million. (via the WSJ)

+ United States revenues for the first quarter of 2005 were $819 million, a 37 percent increase from the $599 million reported for the same period of 2004.

+ International revenues for the first quarter of 2005 were $355 million, a 124 percent increase from the $159 million reported for the same period of 2004.

All of the numbers in this news release.

Postscript: Yahoo Japan has also just reported record earnings for Q1.

Posted by Gary Price at 4:39 PM | Permalink

Behind The Scenes Of Microsoft Takes On Google

Search and Destroy from Fortune (paid subscription required) has some nice details on the war between Google and Microsoft, with a nice lead-off on Bill Gates wondering why back in 2003 that Google was hiring people with skills not for search but for products similar to what Microsoft makes. "We have to watch these guys," he emailed execs.

Yahoo's also in that war, but Google still occupies the high ground that Microsoft wants. It revisits the much discussed issue of Google as operating system, or at least as a software rival to Microsoft, with more quotes of worry on this from Gates. One reason might be the Microsofties heading to Google, including crashing the invite-only affair when its office near Microsoft was opened last year.

Very nice details on MSN Search's Chris Payne making a pitch back in Feb. 2003 that outsourcing search was a bad mistake for Microsoft to make -- instead, it needed to build its own Google-killer technology. Gates, of course, signed off on the new direction, project "Underdog," it was dubbed.

The story revisits what I'd agree was a bad mistake, not to buy the search technology, causing development to take even longer. Then there are more comments and observations on what a challenge the battle has been so far, and how it is far from over.

Posted by Danny Sullivan at 2:27 PM | Permalink

April 17, 2005

Largest U.S. Corporations: Where Do Google and Yahoo Rank?

The 2005 Fortune 500 and Fortune 1000 rankings of America's largest corporations (ranked on revenues) have just been released. Most of the material is only available to Fortune subscribers but since I've access I was interested to see where two of the companies that we're always discussing rank. Yes, I'm talking about Google and Yahoo. Here's what I learned.

Neither company made the Fortune 500 (Microsoft does at #41) but both are found on the list of the Top 1000 companies. Yahoo is ranked at #502 and Google is found at #541 (based on revenues).

More about Yahoo and Google (based on Fortune research): + Both companies are part of Fortune's "Computer and Data Services industry" category of 20 companies. In the category, Yahoo ranks at #8 while Google comes in at #12 based on revenues.

Other companies in this category include: + EDS (#1) + Affiliated Computer Services (#7) --Yahoo-- + SunGard Data Systems (#9) + eBay (#12) --Google-- + Sabre Holdings (#14) + Earthlink (#20) + D&B (#19)

Yahoo $3.575 Billion in Revenues Up 120% from 2003 - $840 Million in Profits Up 253% from 2003 Yahoo ranks #3 for profits in the "Computer and Data Services" category.

Google $3.189 Billion in Revenues Up 118% from 2003 - $399 Million in Profits Up 278% from 2003 Google ranks #8 for profits in the "Computer and Data Services" category.

Note for Researchers: I like business lists and rankings. In fact, I like them so much that about eight years ago I started a compilation of links to web accessible lists called Price's List of Lists. The site is still online and being managed by my friend Trip Wyckoff.

Posted by Gary Price at 5:43 PM | Permalink

April 4, 2005

Yahoo Files Proxy Statement with SEC

Those of you who follow Yahoo closely might be interested to learn that in the past hour the company filed their latest proxy statement (DEF 14A) with the Securities and Exchange Commission. You'll find officer bios, info about excutive compensation, and and read about what will be voted on at the Yahoo Annual Meeting next month in Santa Clara.

Posted by Gary Price at 6:02 PM | Permalink

More On Yahoo's Media Group & Yahoo Wins MSN Content Exec

Yahoo's plans to be a player in providing access to various types of entertainment content is discssed in the AP article: Yahoo raises eyebrows with Hollywood push.

Yahoo says it is in the earliest stages of developing its entertainment strategy and therefore declined to make an executive available to discuss it with The Associated Press. But the company has made it clear that one of [Lloyd] Braun?s [Head of Yahoo Media Group] mandates is to find new ways for Yahoo?s music, games, news, sports, kids and other divisions to draw more visitors.

Moving content off the computer onto cell phones, portable media players and other devices is likely a key goal, many in the industry believe.

On a related note, ClickZ reports in Yahoo! Poaches MSN Content Exec that Scott Moore is leaving his post as MSN's general manager of programming to become the VP of content operations with Yahoo's Media Group.

Posted by Gary Price at 3:41 PM | Permalink

March 1, 2005

So Long Overture, Hello Yahoo! Search Marketing Solutions

A bit of re-branding news to begin the month of March. The Overture brand is no more. All of Overture's and Yahoo's marketing services will now use the name: Yahoo! Search Marketing Solutions. Details in this news release.

Posted by Gary Price at 10:14 AM | Permalink

February 8, 2005

Yahoo! Shareholder Meeting Set for May 19

I just received an e-mail alert that the Yahoo! Annual Shareholder meeting will take place on May 19, 2005 at 1pm EST. The location of the meeting will be announced shortly. Google's shareholder is scheduled for May 12.

Posted by Gary Price at 10:24 AM | Permalink

January 31, 2005

NYT On Yahoo's US Gains & Google's Endless Betas We've had nearly a year of full-blown search wars, but the New York Times notes in Search Sites Play a Game of Constant Catch-Up that despite new releases and "me too" matching of products, Google has still increased its share of searches worldwide from 44 percent in November 2003 to 47 percent in November 2004.

So all's great for Google? Not at all. Yahoo had a gain too, from 25 to 27 percent. And in the US, it was much more dramatic. Google rose from 37 percent to only 38 percent. Yahoo leaped from 29 percent to 35 percent, not that far behind Google's share.

What's behind the gains? The article has lots of quotes from me commenting on how Yahoo shows a desire to define a project, deliver on it and move on. In contrast, I remark how Google delivers something in beta form, then moves on to something else without seeming to finish the job.

Whether this operational style is behind Yahoo's growth or if there are other factors, I don't know. Google responds that it's hard to say it's dropped the ball on any major releases. With respect, I beg to differ:

• Google Images -- one of only two NON-beta products out there -- was allowed to be nearly a year out of date with images. Only now is it showing signs of being updated.  
• Gmail remains both still in beta and invite only mode nearly a year after its rollout. How about finishing it up and making it public before moving into other things?  
• The Orkut social network service? Ditto.  
• Google Desktop still doesn't support Firefox indexing. We've had some notable Firefox developers get hired by Google recently -- perhaps they could take a minute or two to help make what we view in Firefox searchable?  
• The Google Toolbar that has been out even longer than Google Desktop still doesn't support Firefox.  
• Google is literally years behind providing query refinement support to searchers. Google Suggest is Google catching up on this front with the other major players. It was a "20 percent" free time project that one of its engineers cooked up and still hasn't come onto the actual site. It should have been an 80 percent time priority to happen years ago.  
• Google Catalogs? Another beta project rolled out then apparently abandoned. The most current Ikea catalog is from 2003. Just kill it, already.  
• Google News nearing its third year of beta? Google cofounder Sergey Brin has said before that it will come out of beta when it's ready. If it's not ready after three years, when will it be?  
• Similarly, in the NYT story, Google says it will keep the beta label on things until time can be found to add "important features" to these products. Three years for Google News, over two years for the Froogle shopping search engine -- if time hasn't yet been found to put needed important features on these products, then pull them off the home page.

The reality is that Google seems to have no distinction between what makes a "beta" product versus a "final" product. Even the story notes that some of the beta products from Google have been upgraded with new features over time. Any of those times would have been a time to take them out of beta.

How about this roadmap to follow:

• Alpha: You release a product in limited form to a select group of users. Gmail, Orkut are alphas.  
• Beta: You release a product to the general public with the expectation that feedback will be taken over a short period of time (two to three months) before a final release happens.  
• Final: You put the product out on the Google home page or accessible via the More link on the Google home page. Anything out in front of the public in this way is no longer a beta. If it is still a beta, then get it off the main site and back into Google Labs.  
• Point Release: After the final, this is when you add substantial new features to a product. Froogle today is arguably Froogle 2 or Froogle 2.5, given that it has had several major enhancements.

As for point releases, these needn't be labeled for the general public. Froogle doesn't have to be called Froogle 2, for example. But it is useful to use the terminology for those who are commenting on the changes. It lets us say things like "the second release of Froogle" and know there are substantial alterations that have happened.

Google Groups is a classic example of this. Google Groups was a final product. A new Google Groups 2 came out in limited beta. Then it was deemed good enough to replace the original Google Groups. That happened -- but what DIDN'T happen was removing the name beta from what really was a final product.

Believe me, I love that Google has a fun, creative process -- something I did mention as part of my interview for the NYT story but which didn't make the cut. That's probably because I was much more negative about being frustrated by the lack of completion Google has shown.

At this point, Google is well overdue for an operational pause. Don't roll out anything new until you bring stuff out of beta or declare it dead and no longer supported. Then please give me a wealth of new, fun, exciting and technologically disruptive things in the way you do so well -- as well as a firm timeline as to when those things will either receive official, final support or get rolled back out from public view.

More more on this topic, also see More On The Endless Betas Of Google and if you're a Search Engine Watch member, my Breaking Out Of Google's Beta Limbo that charts when major Google services were launched and how they they were (or still are) in beta.

Posted by Danny Sullivan at 1:13 PM | Permalink

January 27, 2005

Yahoo Factor: Victory In Search Wars Through Vertical?

Last to the game with desktop search, The Yahoo Factor from Technology Review argues that Yahoo may succeed in the search wars through a strategy of conquering through vertical search, such as mobile and local.

Posted by Gary Price at 11:46 AM | Permalink

January 18, 2005

Yahoo's 4Q Profit Nearly Triples on Ads

Yahoo! has just released their Q4 2004 earnings. You can find the numbers and highlights in this news release.

Bambi Franscisco at Marketwatch.com reviews the numbers and more in this AP article: Yahoo's 4Q Profit Nearly Triples on Ads.

Also available: Slides from the Yahoo conference call.

Posted by Gary Price at 4:40 PM | Permalink

Yahoo Doesn't Need Six Apart Or Blog Ownership For Ad Purposes

It's kind of obvious that Yahoo will gain some type of blogging solution in the future. It's the only major portal not to offer this, as I've written before: MSN's Third Portal To Gain Blogs; Where's The Blog Search?

David Jackson has a write-up in Yahoo to acquire Six Apart? on why he thinks Yahoo will gain blogging capabilities by acquiring the makers of the popular Movable Type platform.

MovableType's great -- we use it ourselves -- and so would be of interest to anyone who wants to own blogging technology. But the idea Jackson has that Yahoo needs blogs to fuel its pay-per-click growth? Nah.

Google bought Blogger because it was cheap and it figured it could make money but putting its contextual ads out on many of the Blogger sites. But Google later pulled those ads and make them optional. That's wise, because you aren't going to make friends by forcing anyone to carry your ads. So much for needing to own the platform to build ad revenue.

In addition, blogs can be hard to target with ads, given that they often have different types of content mixed onto the same page. MediaPost just had an article looking at this: Blog Ads Hit Rough Patches.

Google's real success with AdSense hasn't been in owning the blogging platform. First, it has signed partnerships with major publishers. Second, it offers an easy-to-use self-serve system that anyone can tap into. Google rolled that out last year, and now you all but stumble over its AdSense placements.

If Yahoo really wanted to turn the web into its billboards, in the way Google does, it would make more sense to have a similar type of paid listings program that any publisher could use.

The downside is that in doing so, advertisers have less control over the targeting of their ads. Kraft wasn't happy to find itself showing up on a pro-white web site recently: Kraft Supports Pro-White Groups? Lack Of Search Ad Targeting Makes It So. Open the flood-gates of self-serve, and problems like this for Google could hit Yahoo as well.

Cory Kleinschmidt over at Traffick takes another swing at the targeting problem in his recent AdSense Faces Extinction -- Unless Google Shakes Things Up post. In it, he points out how uneven targeting is an issue that threatens AdSense. He also notes there are other programs out there to tempt bloggers and other publishers -- which means again, owning the platform doesn't guarantee you the billboard space.

There are good reasons for Yahoo to own a blogging platform, and maybe it will be Six Apart. But the assumption that paid ad placement as a key reason to do so isn't a major factor, from where I sit.

Posted by Danny Sullivan at 10:45 AM | Permalink

January 7, 2005

Semel Speaks on Monday

Those of you who closely follow Yahoo! might want to listen to a webcast of Yahoo CEO Terry Semel's presentation at the Smith Barney Citigroup Entertainment, Media and Telecom Conference on Monday (Jan. 10, 2004 at 3:30pm ET/12:30pm PT). A link to the webcast will be available here.

Posted by Gary Price at 10:34 AM | Permalink

January 3, 2005

Yahoo!, SBC, and Others Partner to Create Home Entertainment Box

Convergence 2005!

About six weeks ago I posted that Yahoo and SBC were planned to extend the types of services available via their partnership.

Today, we're learning about some integrated services that will be available by mid-2005. Say hello to the SBC/Yahoo set-top box.

+ A new set-top box that integrates, "satellite TV programming, digital video recording, video on demand, and Internet content including photos and music [via Launch]."

+ "The service will include a satellite TV receiver [via Dish Network], digital video recorder (DVR) and storage for digital photos and music...and will allow customers to access photos and music and to schedule their digital video recorder (DVR) remotely from any Web-connected computer through the SBC Yahoo! user interface." Plans have also been announced that wireless access will eventually be available.

It wouldn't be at all surprising to see Yahoo also provide video and other search technology via the box in the future.

More in this Reuters story.

Posted by Gary Price at 1:38 PM | Permalink

December 21, 2004

New Accounting Officer at Yahoo

For those of you who closely monitor the management at the major search companies, some news from Yahoo today via an SEC filing. On December 16th, the Yahoo Board of Directors named Michael Murray, Senior Vice President of Finance, the principal accounting officer of the Company. Dow Jones also has a story about Murray's appointment.

Posted by Gary Price at 3:22 PM | Permalink

The Google/Yahoo Rivalry in 2005

The AP's Michael Liedtke offers a look at what 2005 might bring to the Google/Yahoo rivalry.

"We are compiling this collection of very cool technologies and taking our sweet time figuring out what to do with them," Google chief financial officer George Reyes said during an investment conference in early December.

The strategy has produced an exotic casserole that includes e-mail, shopping and news services, three-dimensional maps, digital photography, tools for creating Web logs, or blogs, and software for searching the information stored on computer hard drives.

Yahoo takes a more practical approach to technology, first identifying what people want and then building or buying a product designed to give visitors one less reason to leave its Web site — already the world's most popular online destination.

Posted by Gary Price at 11:05 AM | Permalink

December 17, 2004

Yahoo and Verity Announce Partnership

Some news that spans the enterprise and web search worlds. It's also another example of the increasing importance of federated search tools.

Yahoo! and Verity are partnering to create an application called Verity Enterprise Web Search. Web results will also contain sponsored listings. Verity will share the revenue from the sponsored links with Yahoo.

...with a single query - simultaneously search the high-value information in internal repositories as well as all of the relevant Web content indexed by Yahoo! Search...Search results from internal content repositories and the Web are merged and ranked for relevance, eliminating the need to submit multiple queries to internal sources and public search engines, then manually assimilating results to put the information into perspective.

More in the news release and this eWeek story.

Posted by Gary Price at 12:38 AM | Permalink

December 6, 2004

More on the Yahoo-branded Line of Consumer Electronics

I mentioned over the weekend that I had just learned about a Yahoo-branded DVD player. More about the new Yahoo line of consumer electronics in the ZDNet story: Yahoo puts its mark on consumer electronics

In addition to the DVD player, two home theater systems are available.

It's something that's a consistent part of our marketing strategy to extend our brand name through licensing," said Yahoo spokeswoman Nissa Anklesaria.

Posted by Gary Price at 7:46 PM | Permalink

Google vs. Yahoo Story on CNBC

CNBC just ran a Cory Johnson piece about coporate arch rivals. Today's story looked at Google vs. Yahoo. Here are a few quotes:

"The corportate cultures at Google and Yahoo show you just how different these companies are." -- Cory Johnson, CNBC

"It is a driving force in the way we approach things here, not what is whiz bang but what is helpful and useful an exciting." -- Scott Gatz, Yahoo Engineer

"Great products drive great business and if we focus on delivering for the users the products they want the business works itself out and it has proven to be true." -- Scott Gatz, Yahoo Engineer

"I think our approach is a lot more intergrated, i think our approach is more about, how do we take different parts of our net worth and enhance a more seamless experience." -- Jerry Yang, Yahoo

"The idea at Google is to invent something first and then figure out how to market it." -- Cory Johnson, CNBC

On Google and Yahoo: "Two fundamentally different approaches, Yahoo! comes at search at a way to monitor traffic and google goes at sponsored search as a way to monitor an interesting technology they've developed." -- Mark Mahaney, American Technology Research

No one from Google was quoted or featured in the story.

UPDATE: The complete text of Cory's story is up on the MSNBC site.

Posted by Gary Price at 5:26 PM | Permalink

December 5, 2004

A Yahoo! Branded DVD Player

Ready for some Yahoo brand/logo licensing?

Say hello to the Yahoo DVD player.

I just noticed a press release and a blog posting about a consumer electronics merchansider that's selling a Yahoo! branded DVD player. The actual name is the Yahoo! MetroRetro DVD Player and sells for about $130. If the MetroRetro doesn't work for you, how about the Yahoo! Micro DVD Player.

We are pleased to offer this unique consumer product specially created and designed by YAHOO!," said Chris Fawcett, vice president and chief operating officer of firstSTREET. "The MetroRetro DVD Player represents the culmination of over a year's work in research and product development.

Posted by Gary Price at 12:20 PM | Permalink

October 12, 2004

Profits Triple at Yahoo!

Yahoo's profits for the third-quarter tripled versus the same period last year.

>From a the Bloomberg story, "Net income rose to $253.3 million, or 17 cents a share, from $65.3 million, or 5 cents, a year earlier...Excluding the gain from selling shares in Google's initial public offering, Yahoo said it would have earned $124 million, or 9 cents a share. That matched the average estimate of 9 cents a share from 26 analysts surveyed by Thomson Financial."

You can listen to the conference call and read the complete news release here.

Posted by Gary Price at 4:59 PM | Permalink | Comments (0)

October 5, 2004

Semel Says Yahoo Needs No Merger

Yahoo CEO Terry Semel spoke at an investment conference in New York today and this article: Yahoo chief sees no need to join media merger frenzy, offers a few quotes from the presentation.

In an era of widespread media consolidation, internet media company Yahoo believes television networks, movie studios and music companies should look to it as a partner rather than a merger candidate, chief executive Terry Semel says.

"I think there's another alternative. I see Yahoo as a perfect partner who could help traditional media," Semel said in response to a question about media consolidation at an investment conference in New York.

Semel said Yahoo will continue to build its advertising network around free content as well as developing revenue from premium services aimed at its 300 million unique users.

Semel also recently spoke at the Harvard Business School. This blog post has the details.

Posted by Gary Price at 8:16 PM | Permalink | Comments (0)

October 4, 2004

Semel Speaks at Harvard

Terry Semel spoke to MBA students at Harvard on September 20th. Yahoo CEO Describes Art of the Deal from HBS Working Knowledge has the story. Semel sheds some "behind the scenes" info about the Overture and Inktomi acquisitions.

The fuel for Yahoo since he arrived, he said, has been acquisitions. The biggest price tag to date has been for Overture, a search advertising company, for $1.63 billion. This negotiation was seemingly interminable--"We closed and got board approval three times," he said--but it also illustrated the importance of careful analysis and patience, Semel said.

"Our teams established a relationship, and everyone liked each other. We were [Overture's] biggest client already by far. They could not afford to lose us as a client, and every day we would remind them of that.

"There was just one problem for us: There was nowhere else for us to go."

Posted by Gary Price at 1:18 PM | Permalink | Comments (0)

September 23, 2004

Sergey, Larry, David and Jerry - Forbes Says Rich!

The Forbes list of the 400 richest Americans was just released and for the first time Sergey Brin and Larry Page have made the list. The duo tied for No.43 with $4 billion each. They're also the youngest members of the list.

Yahoo's David Filo appears at No. 74 ($2.6 Billion) on the list while Jerry Yang is ranked at No. 97 ($2.2 Billion).

and in other Brin and Page news... Both have been named 2004 Fellows of the Marconi Foundation at Columbia University.

>From a ZDNet article, "Sir Tim Berners-Lee, who won the same prize in 2002, said in a statement: 'Google held a mirror up to us, reflecting the myriad little actions of linking as a set of concepts which society has discussed and sought."

Posted by Gary Price at 10:38 PM | Permalink | Comments (0)

September 20, 2004

Yahoo CFO Says Paid Search is Far From Matured

Yahoo Keeps 2004 Revenue Source: Dow Jones

and Paid-Search Market 'Far from Mature' - Yahoo CFO Source: Reuters

Susan Decker spoke at conference sponsored by Banc of America Securities.

She told analysts:

+ "Yahoo still expects to report 2004 revenue excluding traffic acquisition costs of $2.455 billion to $2.535 billion and operating cash flow of $945 million to $995 million.:

+ "The company's revenue and margins have tripled in a 10-quarter time period, which has caused profits to multiply 10 times, CFO Decker said."

+ "Paid-search is the fastest growing online advertising segment, and 'we think it's far from matured,' she said. However, she noted that trends in the number of search-engine queries consumers make has taken on seasonal patterns, where the first and fourth quarters show strength and the warmer six months are weaker.

Posted by Gary Price at 7:25 PM | Permalink | Comments (0)

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