Slashdot Mirror
Yahoo Warns of Slowing Internet Advertising Sales
narramissic writes "Yahoo chairman and CEO Terry Semel warned that a slowing U.S. economy is starting to impact ad sales, particularly in 'autos and financial services.' But Yahoo was careful to note that it cannot tell whether the current slowdown is a sign of broader trouble or is limited to ads from the auto and financial sectors."
(IANAEconomist)
Meta will eat itself
"If A equals success, then the formua is A=X+Y+Z. X is work. Y is play. Z is keep your mouth shut" - A Einstein.
Sorry for being a cynic, but I don't see how a decrease in financial services or car ads are a bad thing.
... whatever, dude. In reality, most of them can't "beat the market" and all you get is the honor of paying them usurious fees for their stock-picking "wisdom".
1) Cars: auto sales are currently a big cartel. Every state has regulations stopping or significantly shackling internet sales of new cars. All that auto dealerships now offer you is the degrading process of "oh, gee, I dunno, I'm gonna have to talk to my boss about that offer you just made" and "here is a payment plan we can offer you in which I'll only talk about the monthly payments and hide the effective 14% interest rate that amounts to".
2) The financial services industry basically revolves around convincing people to invest with them to "beat the market". They thrive on artificially increasing the complexity of investing. I've had a financial advisor tell me that my investment plan is going to look "totally different from the guy in the next cubicle". Yeah, same age, same investment horizon
We really do need less of these ads. Is there something bigger I'm missing?
Apology to Ubuntu forum.
are sales slowing, or moving away from Yahoo? I know they've had a fairly poor showing as of late, is this just an attempt to try and explain that away within a more general setting and keep the share price up, hoping that people will see them still as a good bet? Still, I suppose that buying new cars might be one of the first things to take a hit if the economy was slowing, but wouldn't this spur advertising?...
Anyone have google's ad revenue relating specific to these areas?
*''I can't believe it's not a hyperlink.''
could the adblock utilities have any effect on this? i think we've all known that if everyone used adblockers, we'd have a big problem: free sites would no longer have any income. we havent really worried about it because it didnt seem like enough of us were using them to make a difference.
could this be the first sign?
Hmm, ad sales slowing down in sectors that are strongly sensitive to interest rate changes, at a time when interest rates have been ramped up by the Federal Reserve (who are only now starting to talk about slowing this rate hike campaign)? Color me somewhat unsurprised. A sharp dip in a few sectors is less worrisome to me than a shallower dip across the board. If the broader ad market begins to slump and does so for a few quarters in a row, yeah, it might be time to rethink all those old-but-new-again ad revenue dependent business models out there.
News for Geeks in Austin, TX
housing bubble.
For those of you that don't think this can affect the economy across the board, just remember the tech bubble from a few years ago.
---
Sounds like someone's sales are slumping, and they want to bring the market down with them.
Also, US Economy != World Economy, influences be damned. Is the global economy slowing overall, or no?
After RTFA, I think someone was trying to short some Yahoo stock more than make an accurate forecast...
Quo usque tandem abutere, Nimbus, patientia nostra?
Interest rates are the key to advertising speding in both sectors.
Sorry guys, this is all my fault. See, I block all ads. I'm antisocial. Forgive me?
"THERE IS NO JUSTICE, THERE IS ONLY ME." -Death
How can they just blame the economy for a slump of impact ads. There could be several other factors that could cause the same effect. As if the slow U.S. economy is only effecting Auto and financial ads. I believe we would see slow down in many other areas. Maybe they just aren't using effective advertising.
In a world of acronyms, the words are the real victims.
"They're growing, but they're not growing as quickly as we would have hoped at this moment in time," said Semel.
If I go from zero to 60 in 7 secs and then go from 60 to 80 in the next 7 secs, that isn't a "slowdown". It's a decrease in the rate of increase but NOT A SLOWDOWN. Not that anyone reads the article anyway.
With that proportion of the economy involved in getting blown up and destroyed it's not entirely surprising the economy is in trouble.
http://www.thebudgetgraph.com/
Most of it is paid by borrowing rather than taxation, but the increased money supply simply kicks inflation and therefore interest rates into high gear. It'll get worse as the Arabs liquidate their dollar holdings.
Deleted
"Hi Y'all! I'm the Honda Fit. I'm totally spacious and affordable. My fav bands are the Chemical Brothers and O.A.R. Here are some pics of my fam, Uncle Civic, Granny Accord. Y'all, I'm 0.0% APR for 20 months!"
the mods may say you posted flamebait, but to me it's a flame that warms my heart. rock on, brother! --chebucto
1) There is a downturn in Auto advertising and FS advertising
2) Yahoo are getting a smaller slice of the advertising pie
If you were the CEO, which option would you talk about?
An Eye for an Eye will make the whole world blind - Gandhi
A couple of quarters ago yahoo gave similar guidance and there was a couple of day slump for google then they beat the street expectations. People are forgetting this could be the economy slowing down or Yahoo just giving market share away to competitors (like google).
GENERATION 27: The first time you see this, copy it into your sig on any forum and add 1 to the generation.
Not to mention the absolute horde of economic data which shows that a major US slowdown is not only inevitable but has actually already started. It seems though the government are doing absolutly everything they can to cover this up at least till after november.
What makes me mad though is that US companies need all the info they can get to enable them to ride out this slowdown with minimal losses, yet the government is currently hiding the truth purely for political reasons. Come December when they actually start admitting the strikingly obvious, it may be too late. The big companies know the deal, which is at least partly why advertising budgets are plummeting, but it will be the small companies that rely on government data and advice which may well end up getting screwed!
You really might want to read This first... 64% of total sounds more than just a bit too big of a number, 'mano. (the site you supplied may explain why... I'm not Bush's greatest fan or anything, but man - propaganda is propaganda, no matter what side you view it from)
Quo usque tandem abutere, Nimbus, patientia nostra?
All one has to do to see the consequences of a real estate bubble is look at what
happened to Japan back in the early 90's when the Nikkei took a serious nosedive.
To be sure, it was only one piece of the bubble, but the land being seriously
overvalued (as much as 14 times it's current values, which are still dropping...)
and the sudden cooling of the economy by the government triggered a spiral they're
still trying to recover from- and the land/property bubble made it much, much
worse than it probably ought to have been.
To be sure, we don't have QUITE the bubble in land valuations and housing valuations
that Japan had, but it's going to send things back into another recession if things
don't improve a little quicker to lessen the blow from that bubble bursting. But
this only causes a recession because people do stupid things like base the current
economic health of the country off of things like the stock market valuations- the
stock market does NOT reflect the health of the country, but people keep pulling back
when they should be forging forward when the market takes a small nosedive because
they're terrified of getting caught in the messes that were caused by the Great
Depression. It's sad really. The last recession could have been less severe and
wouldn't have lasted as long as it did if people would have just managed their budgets
accordingly, doing what they would have normally if the bubble hadn't have burst.
It went as long as it did and as deep as it did because people let the stock market
do the decision making for them (What? You're going to let a bunch of gamblers and
manipulators determine what you are going to spend on capital purchases you're
actually needing to do? Tell me again why you're an executive manager?). I fear
the same thing if the ongoing housing bubble brought on by the tech bubble pops instead
of deflates slowly or the economy rises up to meet it.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
Firstly, auto and financial services are directly tied together - when is the last time you paid cash for a car. I'm not talking about the 1989 Doge Omni style either.
q src=1&o=0&l=dir the #1 result for the search 'yahoo advertising slump' and this was back in '01. Sounds to me like someone may be looking to give some people the good ole' heave ho, but wanted people to warm up to the idea in a nice PR sort of way.
Secondly - has anyone botherd to Ask Jeeves? Sure, Google is your friend, but sometimes you need a buttler, espically when you want a beer.
http://www.ask.com/web?q=yahoo+advertising+slump&
While there are always "signs" that point to "weaknesses" in the economy, most of what is out there is FUD spread by the mainstream media. The reality is that the current administration picked up the pieces of the .com crash and 9/11 and has done a remarkable job energizing the US economic engine through tax cuts. I encourage you to read the following piece by respected economic advisor Lawrence Kudlow: http://www.realclearpolitics.com/articles/2006/07/ the_bigbang_story_of_us_privat.html
Here's a few points:
- Did you know that just over the past 11 quarters, dating back to the June 2003 Bush tax cuts, America has increased the size of its entire economy by 20 percent?
- In less than three years, the U.S. economic pie has expanded by $2.2 trillion, an output add-on that is roughly the same size as the total Chinese economy. (so much for the "China is going to surpass us anytime soon theory - ed.)
- Since the 2003 tax cuts, tax-revenue collections from the expanding economy have been surging at double-digit rates while the deficit is constantly being revised downward.
Housing MAY cause some short-term pressures (though I think this will be more isolated than is being reported) but it certainly isn't going to cause the economy to come to a halt. Maybe Yahoo should take a look at Google's numbers which, if I'm not mistaken, are doing just fine on the ad revenue side. Perhaps Yahoo should take a look in the mirror before proclaiming this is a US economic problem. When all the indicators show that online advertising rates industry-wide are down for multiple quarters I'll listen. Until then, this looks like short-term CYA by a CEO to help explain why his SG&A and EBITDA are not meeting the numbers the analysts want to see next quarter.
I wonder what is included in the "Financial Services" category. Some posters seem to assume this is just all the online brokers. I bet it is more than that.
One of the most frequent (and annoying) class of advertisers I see on Yahoo are the seedy mortgage brokers, with all their ads for "teaser rate" interest only adjustable rate mortgages.
Now that the bottom is falling out of the mortgage industry, the brokers are getting more desperate for new suckers, er I mean "clients". There are less of those to go around and naturally the advertising is going to fall off.
Maybe Yahoo should just lift their prohibition against advertising porn. I bet they are leaving a lot of dollars on the table by not being willing to have a crotch shot on their home page. At least that industry is more ethical than the people who have been selling negative amortization adjustable rate mortgages on over assessed homes to people who least understand (and can least afford) what they were being set up for.
Who on earth would graph federal spending and not show the "non discretionary" portion?
That's like me telling my wife that we have to cut back on groceries and diapers, because they consume 84% of our discretionary spending. Meanwhile, I'm spending 8 times as much on heroin, crack, hookers, and video games and calling it "non discretionary".
Social Security and Medicare are going to bankrupt us a lot faster than tomahawk missiles.
The company I work for, a courier service, has seen a decrease in business for the past several months. And while I hear the summer is the slow season, business has not picked up to its normal level since the start of September. Other people in the business we have talked with have also been slow as of late.
So atleast in my perspective, certain areas of business have slowed down.
Also, I believe the company has also pulled back on its advertising budget as a result, although they have not done any ppc or online advertising.
Maybe the people buying the advertising space are just catching on to the fact that people don't read yahoo ads? What average person is really going to see an ad on the corner of their screen and say "Damn, that little text ad is so rocking that I think I need to go buy a car from them right now"?
Yep, looks like a definite downturn in the debt industry, IMHO.
--fatboy
Comment removed based on user account deletion
Newsflash: U.S. economy is in BIG trouble.
... circa 2002/2003, and reached its peak summer 2005. Crashes always follow bubbles, and the current real estate market is no exception.
:)
Short history lesson: Federal reserve started to inflate the money supply in early 1995 (blue line in the graph). The 'tech bubble' followed a couple years later. That trend wasn't sustainable, and the dot-coms bombed sometime in 2000/2001. The economy was well on its way to a recession by late-summer/fall 2001. The Federal Reserve responded to "9/11" by cutting interest rates to 1% (over several months), supposedly for the purpose of 'stimulating' the economy.
Newsflash: Mismanagement of the U.S. currency has caused half of the economic equation, production, to move to Asia and Mexico, either in search of lower wages or to flee rising U.S. costs. This is not a new phenomena, and has been ongoing since the 1970's, though it is only recently (circa-2001) that that trend has accelerated to a completely unsustainable level. Cisco assembled their wireless access points in the U.S., and Intel made motherboards in Silicon Valley up until 1999/2000 or so. What happened to the Americans who used to be employed assembling motherboards and other electronics? Perhaps some of them moved to finance, and some to auto sales. But I digress...
Thus, when the Fed slashed interest rates starting in 2001, instead of entrepreneurs borrowing money to set up new production lines, individuals borrowed money to buy a bigger house. And an investment house. And a condo in the mountains. The widely-proclaimed 'housing bubble' started to take off
Low interest rates also facilitated GM's 0% financing "keep america rolling" sales campaign. (don't remember what Ford & Chrysler called their corresponding 0% programs). But now Ford and General Motors are in trouble, because they can't sell new cars to customers whose credit line is maxed out.
Gonna get ugly, folks. The good news is that this coming transition marks the end of corporate wage-slavery. The economic system that will arise from the ashes will be founded with something along the lines of worker cooperatives. This is the worker benefiting from their own labor. No more slaving away to pay the "shareholders" dividends (mostly rich dudes who sit on their lazy asses and parasitically live off the working class).
John Gatto's book about the 'massification' of America fits in here too. Gatto maintains that the original american ideal was an independent livelihood. Blacksmith, farmer, woodworker, wheelmaker, etc. Mass production / standardization required government schools to produce a populace who would accept working a repetive job where someone else ("shareholder") was the primary beneficiary. Fun while it lasted, right?
Also see my recent comment, how the government spins the stats.
Learn the rules so you know how to break them properly.
www.teslabox.com
Online advertisers are increasingly moving from advertising on large portals to viral marketing and advertising on blogs.
I wouldn't be surprised at all, if that means Yahoo is seeing less ad revenue.
In Soviet Russia, I ruled you
...saturated. Extreme low interest rates by the Fed led to an over abundance of "irrational exuberance" part two to try and bring the economy out of the mini recession caused by the dot bomb years, and any one who wanted a cheap mortgage got one, then proceeded to try their hands at flipping to make fast easy money cash. Now that that is about milked out, and a lot of people are now stuck with over priced real estate and ARMS...well...
Cars. Again, saturated with all sorts of vehicles people don't want, and they can't even make enough of what people do want, namely more hybrid options, including plug in hybrids which NO major manufacturer sells yet, more high mileage diesel options, etc. And cars just got way too expensive in the last ten years anyway. Even at zero percent, which I can see at most of the lots around here, they are still way over priced and the lots are slap full, from the street to the back fence. In twenty years we have gone from cars cost what cars should cost to now they cost what HOUSES used to cost not too long ago.
You can throw all the ads you want to at those two problems but it won't help if the fundamental aspects to those problems aren't addressed, so I imagine they are starting to notice that. and just how many-what sort of percentage-of middle man wealth transferers can any economy really take? You have wealth production, wealth service and wealth rearrangement, and only one of those types of jobs actually makes *new wealth* the others just dilute the pool to a great extent. Again, throw all the ads you want to at the non wealth producing part of the economy, it won't make it one bit better.
..this could also be Yahoo! trying to redirect some of its own loss upon Google. Given that they're making such a generalization based only upon short term quarterly data, yet extrapolating into the future..this may just be corporate posturing.
-- Consider:
Yahoo's projection of advertising growth was a bit over enthusiastic --> Yahoo investors show their disappointment with the purse --> Yahoo attempts to save face by characterizing their own messup as an (exaggerated) general market trend --> Google's investors feel lukewarm --> Google gets hurt too?
"...at a time when interest rates have been ramped up by the Federal Reserve (who are only now starting to talk about slowing this rate hike campaign)?"
Contrary to popular belief, the Fed has very little latitude in setting interest rates because interest rates are market driven. The government finances a portion of its debts through borrowing (issuing bonds) and must consequently pay whatever the lowest bidder offers. See: How Treasury Auctions Work
9/11 Eyewitnesses to Explosive WTC Demolition 1 of 2
IMO, the problem is a credit bubble, of which housing prices (both in the US and abroad) are a symptom. Too much spending, too little saving. I think we're going start experiencing a global recession/depression starting around 2008... It'll be interesting to see how central banks respond to this upcoming challenge. If the past half decade has been any indication, they'll start handing out cheap money right and left...
I could not justify my existence if I were a turkey farmer. Would I terminate myself? Undoubtably, yes.
The summary states it is a slowdown in sales, while the article states that it is a slowdown in the GROWTH of sales. Sales are still increasing, but not as fast as they once were.
Maybe these advertisers have actually realized that Yahoo! actually sucks.
If someone is passing you on the right, you are an asshole for driving in the wrong lane.
I don't know if this is discussed in the reference, but the housing market (and the increase in housing prices correlated with it) might be a substantial problem. A significant number of people have pulled value from their homes via home-equity loans, and if the loan rates are variable, increased interest rates simultaneously increase their payments and decrease the value of their house (by decreasing the market for their houses). Salary increases have not increased much more (if at all) above inflation, so that people make no more money in real terms than thirty years ago - so the increases in consumer spending have to come from somewhere, likely from their houses which no longer have the value they have drawn down on (like finding out the "extra" money you had and spent wasn't really extra, and now you owe it all and then some). In addition, some people have either interest-only mortgages or other variants, all of which have a grace period but all of whose payments will drastically increase at some point in the next year or two. These events would seem to pull lots of money out of the economy, worse if any of the mortgage lenders go under as well.
The other problem - do the tax cuts return more in taxes than they cost in direct lost income? Tax cuts are like a loan to spur growth - but if they don't return enough money, you have lots of debt and no way to pay it off, unless you cut spending (which means people have to pay for what the government no longer does) or raise taxes again.
This is a weak excuse, but it's never the CEO's fault if the company does poorly, so the excuse-making should be no surprise.
Yahoo was careful to note that it cannot tell whether the current slowdown is a sign of broader trouble or is limited to ads from the auto and financial sectors.
Or limited to Yahoo's sales of auto/financial ads, perhaps because of a lack of response from Yahoo users. Or maybe online advertising is just ineffective, and those two sectors are simply the first to realize it. Or maybe it's just a completely meaningless fluke. Thanks for clearing that up for us, Yahoo.
https://www.eff.org/https-everywhere
"Yahoo chairman and CEO Terry Semel" alerts about drop in advertising, at result his company shares fall, Google follows the fall, NASDAQ lives one of the worst days in this year...
;)
Some anonymous moron tags it as "FUD".
If it makes perfect sense to you, welcome to Web 2.0. For people like me, it will take a while to get used to it.
Meanwhile the likes of Google et al produce record numbers.
The problem isn't the economy, it's Yahoo. I hate it when someone says, "Oh but they're a mature company, their sales are flat." There's no such thing as a mature company, there is only a company that has forgotton how to innovate. Yahoo's advertising system is a disaster. Especially their "ad sense" killer which bombed horribly.
Yahoo's problem is itself, period.
2 years and no mod points. Join reddit. Because openness is good.
The slowdown in ad sales for financial services is because of the trashing *cough* overhauling of the finance message boards, thus driving everyone with at least two brain cells FAR AWAY.
The finance boards have turned into a sewer.
If all you have left is the chucks, the 13 yr olds, and the drunken profane bloggers, just _who_ are you going to sell _FINANCIAL SERVICES_ to?
EH? TERRY?
My gawd, someone needs a fr0h slap.
The next Yahoo advertising push is "What would life be like without Yahoo?"
Well, I'll tell ya, Terry, it's just _wonderful!_
--
BMO - I am not a fucking AVATAR!