Yahoo to Delay Ad Platform Upgrade

  |  July 18, 2006   |  Comments

The company announced the delay as it reported second quarter earnings of $164 million.

Yahoo will delay its long-awaited new interface for advertisers until the fourth quarter, after previously saying it would be ready in Q3. The news came as the company announced its second-quarter earnings.

Net income for the quarter dropped precipitously from the same period last year, because of one-time transactions and a change in the way stock options are accounted for. The company reported a profit of $164 million, or $0.11 per share, as compared to $755 million, or $0.51 per share for the 2005 period. The numbers were in line with what analysts were expecting.

Revenues were up, however. Yahoo reported $1.6 billion in revenues for the second quarter, a 26 percent increase compared to the $1.3 billion it brought in during the same period of 2005.

Yahoo blamed the delay in the launch of its ad platform on previously unforeseen complications in the quality control and testing process.

"We wanted to make sure that we got it right," said COO Dan Rosenzweig, noting that the company plans to perform "over 20,000 different tests." He added, "We'd rather take the extra time to make sure that we do it right rather than rush it for a quarter."

The company has been touting the platform and its new features for months. Changes include keyword grouping enhancements, IP-based mapping features to support geo-targeting, better scheduling capabilities, the expression of business goals such as cost-per-acquisition, and indirect conversion tracking. Yahoo will also move to a Google-like quality-based ranking model as part of the switch.

Yahoo continued to express optimism about its market position in both graphic and search advertising. Though the company no longer breaks out revenue by these categories, it said marketing services as a whole brought in $1.4 billion for the second quarter, up 27 percent over the $1.1 billion in revenues it reported during the same period last year.

The company also used its earnings conference call to speak out on the issue of click fraud. Yahoo execs said its system had been evaluated by a third party, which had found click fraud levels lower than recently-reported public numbers. (Outsell recently pegged the level of fraudulent clicks at 14.6 percent.) The company appears to be trying to capitalize on negative press that competitor Google has been getting around the issue.

"We are committed to establishing industry-wide standards on click fraud," said CEO Terry Semel.

The company kept its predictions for the full year 2006 the same as it had previously forecast. Yahoo expects $4.6 billion to $4.9 billion in revenues, excluding traffic acquisition costs, for the full year. Revenues for the third quarter, excluding traffic costs, are expected to come in between $1.1 billion and $1.2 billion. Those estimates are largely in line with Wall Street expectations.

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

ABOUT THE AUTHOR

Pamela Parker

Pamela Parker is a former managing editor of ClickZ News, Features, and Experts. She's been covering interactive advertising and marketing since the boom days of 1999, chronicling the dot-com crash and the subsequent rise of the medium. Before working at ClickZ, Parker was associate editor at @NY, a pioneering Web site and e-mail newsletter covering New York new media start-ups. Parker received a master's degree in journalism, with a concentration in new media, from Columbia University's Graduate School of Journalism.

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Internet Marketing Campaign Manager
      Internet Marketing Campaign Manager (Straight North, LLC) - Fort MillWe are looking for a talented Internet Marketing Campaign Manager to join the...
    • Online Marketing Coordinator
      Online Marketing Coordinator (NewMarket Health) - BaltimoreWant to learn marketing from the best minds in the business? NewMarket Health, a subsidiary...
    • Call Center Manager
      Call Center Manager (Common Sense Publishing) - Delray BeachWanted: Dynamic Call Center Manager with a Proven Track Record of Improving Response...