Source: The Street
Yahoo! could steal significant amounts of ad spending out of national advertisers’ television budgets. But suggested the shift wouldn’t be significant until 2005. Yahoo!’s stock continued its strong advance of the past year, rising $1 to $28.61. The gains have come both in the branded advertising business and the pay-per-click search marketing business that’s the specialty of the Overture Services business Yahoo! acquired last year.
Thanks to online advertising sales, Yahoo! last month blew past Wall Street’s earnings estimates for its first quarter. And last week, Yahoo! raised its guidance for operating cash flow margins, based in part on the company’s ability to export its business internationally.
Among the forces moving TV advertisers onto the Internet, are the proliferation of broadband connections to the Internet and migration of males from age 18 to 34 — in their media usage — from television to the Internet. TV advertisers, however, aren’t shifting as quickly as are audiences.
The toughest industry for Yahoo! to penetrate has been consumer packaged goods. That’s at least in part because, one can’t sell a tube of toothpaste over the Internet.
Telcos, on the other hand, have shifted a significant percentage of their ad spending from newspapers to the Internet, and entertainment companies have shifted from newspapers as well.