Yahoo! advertising sales slump in second quarter

by Fiona Ramsay, marketingmagazine.co.uk 22-Jul-09, 09:24

LONDON - Yahoo!'s second quarter revenues were hit by a slump in advertising, with a 15% decline in search advertising revenue and a 14% decline in display advertising revenue.

Yahoo! reported revenues of $1.6bn for the quarter ended 30 June, a decrease of 13% year-on-year. International revenues were $421m.

The decrease comes as competition in the search market intensifies, with the launch of Microsoft's Bing. Microsoft and Yahoo! are still in talks over a potential acquisition which will bring the companies together to compete with Google.

The online business said total revenues were hit by the effects of currency rate fluctuations, the sale of Kelkoo in late 2008 and lower fees revenues from voice-over IP services and subscription music offerings.

Advertising revenues were $858m for the second quarter of 2009, a 16% decrease. Revenues from affiliate sites were $520m for the second quarter of 2009, a 9% decrease.

CEO Carol Bartz said Yahoo!'s new homepage was evidence of its efforts to create‘innovative products aimed at increasing user engagement while offering the most compelling advertising proposition in the industry'.

Yahoo!'s new homepage lets people add apps from Yahoo! or other sites on the web, It is available in the US at http://yahoo.com/trynew and will roll-out in France, India, the UK, and on mobile devices over the coming week.

The new homepage has new features including ‘My Favourites', an App Maker, a snapshot of online search trends and social updates integrated with Facebook and MySpace.