Yahoo’s tanking search revenue (down 19%) ruined what would have been an otherwise strong earnings report last night.
Carol Bartz blamed sliding search revenue on Microsoft’s adCenter not delivering high enough revenue per search — her implication is that the ads aren’t as relevant as they were under Yahoo’s system, so users aren’t clicking on them as much.
Danny Sullivan, one of the smartest journalists watching the search business, took a long look at Bartz’s claim and Yahoo’s search business, and he thinks Bartz is too quick the place the blame at Microsoft’s feet.
He found that Yahoo’s search business was declining before the Microsoft deal. It has continued that decline at a steady rate — even if you subtract out the 12% that Yahoo pays Microsoft now that Bing is powering its search results.
Sullivan offers an alternate reason why revenue per search has continued to drop after the Microsoft deal: Bing offers better organic results than Yahoo did, so users are clicking on the actual search results and not relying as much on the ads.
Whatever the reason for the drop in Yahoo’s search, Sullivan calls it a “disaster,” and warns, “The search revenues need to reverse themselves, and quickly, for Yahoo to be convincing that the deal it hawked is really paying off. Otherwise, when 2012 rolls around, and those headwinds have finally slacked off, Yahoo might find it has slowed down to earning Blekko money.”
Follow the Chart Of The Day on Twitter: @chartoftheday
This chart pretty much sums up Yahoo’s future prospects, doesn’t it? For the year, time spent on Yahoo’s properties slipped from first place to third place, according to comScore. And we see no reason for it to reverse.
If you’re Yahoo, and looking for a glimmer of hope, you can console yourself by saying, “at least we’re not AOL.” AOL’s share of time was in fifth place, and slipped throughout the year.
Microsoft’s search engines (MSN/Windows Live/Bing Search) have 13.9% share of the search market versus 13.1% share for Yahoo. Google is still considerably larger than either with 65.1% share.
For what it’s worth, comScore has not seen Bing overtake Yahoo, yet. According to the latest comScore data from July, Bing is still number three, trailing Yahoo by percentage points.
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
- Netflix vs Blockbuster - Perfect example of an industry replaced by a more efficient version of itself
- Coke vs Pepsi vs Dr Pepper
- Marketing Costs Normalized to CPM Basis for Comparison
- 3G calling, no registration, and totally free
- AOL's Plan To Steal TV Ad Dollars Is Totally Working
- The Top Endorsement Earners In Each Sport
- drag2share: The Most Pinned Brand On Pinterest Doesn't Even Use A Pinterest Account [THE BRIEF]
- Groupon launches Breadcrumb iPad app, vows to not be a typical POS
- HP Mini 311 Nvidia ION Netbook Hackintosh'ed
- #SESNY: Toward a Performance Mindset for All Advertising
- Tips for Marketers Selecting a Digital Agency
- Context Is Not King or Queen; It's Just Necessary
- 2013 New Year's Digital Marketing Resolutions
- The Good, Bad, and Ugly of Online Campaign Ratings and eGRPs
- Why You Should Banish the Net Promoter Score Immediately
- Digital Strategy To-MAY-to vs. To-MAH-to
- The Agency-Client Relationship is Forever Changed
- Targeting vs. Privacy - Who Will Win?
- Digital + Traditional = Unified Marketing
- May 2013 (66)
- April 2013 (70)
- March 2013 (114)
- February 2013 (89)
- January 2013 (136)
- December 2012 (96)
- November 2012 (130)
- October 2012 (147)
- September 2012 (94)
- August 2012 (92)
- July 2012 (112)
- June 2012 (71)
- May 2012 (82)
- April 2012 (80)
- March 2012 (122)
- February 2012 (114)
- January 2012 (129)
- December 2011 (60)
- November 2011 (54)
- October 2011 (29)
- September 2011 (17)
- August 2011 (30)
- July 2011 (18)
- June 2011 (19)
- May 2011 (23)
- April 2011 (23)
- March 2011 (52)
- February 2011 (69)
- January 2011 (108)
- December 2010 (82)
- November 2010 (67)
- October 2010 (68)
- September 2010 (44)
- August 2010 (101)
- July 2010 (61)
- June 2010 (28)
- May 2010 (28)
- April 2010 (26)
- March 2010 (33)
- February 2010 (21)
- January 2010 (12)
- December 2009 (4)
- November 2009 (2)
- October 2009 (14)
- September 2009 (6)
- August 2009 (19)
- July 2009 (34)
- June 2009 (11)
- May 2009 (4)
- April 2009 (6)
- March 2009 (13)
- February 2009 (32)
- January 2009 (25)
- December 2008 (1)
- October 2008 (1)
- June 2008 (1)
- November 2007 (1)