Yahoo Ad Business In Trouble

October 22 00:00 2011

New York, Oct 22, 2011 ( – The ad business of the internet major Yahoo (NASDAQ: YHOO) has been in troubled times of late.  The online ad industry in the US has grown by 20% in the past year. However, by comparison Yahoo’s sales are flat to moderately increasing. This has pressurised the company into firing its CEO Carol Bartz. The new management team is desperate to get their hands on any business deals that they can.

Yahoo’s core asset was its homepage and the sites which are linked to it like its health, travel, search portal etc. These sites have sustained heavy traffic since the beginning of the dot com industry till today and are also the bed-rock of Yahoo’s online dispay ad revenues. These revenues account for as much as $4.1 billion per year. An ad on yahoo home page for a whole day can cost close to $850000.

Yahoo has been taking frantic measures to save its business. It has cut the ad prices by 10% to 15% and avoids disputes with its client at all costs. Yahoo is even offering custom animation to many of its clients on their ads.

The reason behind this fall has been the availability of cheaper ways to reach large number of audiences through websites like Facebook and Google (NASDAQ: GOOG).