Rohan cited three reasons for the changes:
- He says the company is in the process of losing at least three affiliate to Google (GOOG), including Daum in Korea.
- He says that the “relevancy-based re-ranking of search links” in March could depress monetization before it helps.
- An increase in turnover in the sales force “may lead to less-than-market growth in display advertising in the near-term.”
Rohan says company guidance for 2007, expected when the company reports on January 23, “may be more conservative…than investors think,” he writes in a research note.
Despite all that, Rohan maintains an Outperform rating on the stock, and says “we would be adding to positons as the company resets the bar in late January.”
Yahoo shares today are off 15 cents at $26.26.