Yahoo’s Q3 Net Income Shows Online Advertising Has Stabilized

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Jason Parker's Internet Marketing Show

Several technology firms posted strong Q3 earnings beating analyst’s expectations. Companies who triggered an optimistic view of the market include Google, IBM, Intel, and now, Yahoo!

In the third quarter, Yahoo posted gross revenue of $1.58 billion, net revenue of $1.13 after commissions to ad partners, and a total net profit of $186.1 million. Though its gross revenue was lower that 12% over a year ago, its net profit increase is 244% compared to the same quarter last year. It clearly shows an improvement in the company’s bottom line after some strong moves that involved shutting down Geocities, a pioneer in terms of free web hosting service.

Yahoo’s reorganization and rebranding campaign under CEO Carol Bartz is now showing up in the bottom line but the company’s revenue from guaranteed ads also grew at a mid-single-digit percentage rate. The growth was much better than its non-guaranteed ads that declined after they rid themselves of lower quality ads from weight loss and other schemes.

Yahoo’s guaranteed ads are those that are displayed on its own sites such as its home page; non-guaranteed ads are the ones that are displayed on less valuable pages such as a user’s email page.

Yahoo’s CFO, Tim Morse said that the company is starting to see some “loosening” of ad spending budgets as the economy recovers.

Google’s Q3 financial reports last week showed an uptrend in online advertising, and while the figures posted by Yahoo is not as high, it adds further proof that the online advertising industry is now coming back to life after a previous slowdown.

More at:

http://news.cnet.com/8301-30684_3-10379330-265.html
http://news.zdnet.co.uk/itmanagement/0,1000000308,39823234,00.htm
http://www.businessweek.com/technology/content/oct2009/tc20091020_183179.htm

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