Yahoo! 's Warning: Internet Ad Growth Bumpier Than Expected

Sep.20.06 | About: Yahoo! Inc. (YHOO)

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Yahoo Warns Of Weakness In Web-Ad Sales

  • Summary: At an investor conference in California yesterday, Yahoo! Inc reported that softening ad sales might impinge on third-quarter revenues. CEO Terry Semel said that auto and finance companies are still funneling ad dollars to Yahoo! (NASDAQ:YHOO), but that, "they're not growing as quickly as we might have hoped at this point in time." The news caused an immediate sell-off in Yahoo! shares and other Internet stocks, including Google (NASDAQ:GOOG) and eBay (NASDAQ:EBAY). Media analysts suggest recent auto company troubles and the cooling real estate market could be responsible for the weakness. Others disagree, saying the slowing growth at Yahoo! could be due to increased competition for Internet ad dollars from broadband and cable networks and other Internet advertising outlets. Regardless, Yahoo's warning is a wake-up call to the "many investors [who] have been betting that a shift in ad spending from traditional media to the Internet would ensure continued swift growth in online ad revenue for years to come."
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