Business Capital Finance Global In Market Marketplace Sport

Posted on January 03, 2012 by Admin
Business Capital Finance Global In Market Marketplace Sport

Business Capital Finance Global In Market Marketplace Sport

Each month, more than 500 million visitors use Yahoo online services ranging from email, news, music, kids entertainment, travel, sports, real estate and finance. Advertising accounts for most of Yahoo's revenues principally from non-search forms of online marketing including banner and video ads.

Yahoo's approach is to use content to attract and keep consumers on its branded sites while they buy as many advertised products as possible. In contrast, Google offers high-quality search results that encourage Web surfers to leave their search engine URL but to return frequently.

Yahoo's suite of 35 international Web sites offer email, news, financial tools, social networking, photo sharing, personalized home pages, mapping, shopping and voice communications. Yahoo is the world's largest free email provider, with some 43% of the U.S. market compared to Google's 2.5%. The firm also dominates online finance controlling 35% of the American market compared to less than 1% for Google. Yahoo is also a respected player in major online news services with a 6% market share, more than triple that of Google.

So why has Yahoo's stock recently plunged more than 13% to about US$25.30, within 2% of its 52-week low of $24.91?

At a September 19 conference, company CFO Sue Decker told investors that third quarter sales would be about $1.1 billion, at the low end of the company's forecast in July and about 5% less than what analysts had expected. Decker blamed weak sales of financial and automotive ads during the last 4 weeks in September. Yahoo's stock price slid because some fear that Yahoo's recent online ad weakness is part of a broader problem. Financial ads comprise about 12% of overall Internet ad spending while online auto ads account for 10%. Worried investors say that these two sectors provide up to 20% of Yahoo's sales in the United States. Another cause for concern is the launch of Google Finance back in March, which threatens to take away Yahoo customers.

And The Winner Is...

From an international trade perspective, the "wall of worry" thinking may be short-sighted. First, the 4-week slowdown in auto ad sales may have resulted from a dip in the number of new autos released in the second and third quarters this year. With fewer new lines to market, the reduction in online ads looks like a seasonal discrepancy. Since the number of new cars is expected to rise in the fourth quarter, Yahoo may well benefit from increases in online auto ads later this year.