Whose Rebound Is This Anyway?
Yahoo!'s news was great, just not great enough.
Yahoo!'s news was great, just not great enough.
The news was great, just not great enough.
I refer to the real-time ebb and flow of public opinion that surrounded Yahoo’s second-quarter earnings announcement. It came midweek, after market close (and before the news of the Overture purchase, which really reshuffled this deck of cards). In the days before the announcement, the stock price surged and phones leapt off their hooks. “Is it here?” the market asked. “Is this the online advertising rebound we’ve been waiting for? How great is this?!”
Then the announcement came. Earnings were stellar and met analyst expectations.
“Oh,” said the market. “Met expectations, huh? Well. Shoot.” The stock price dropped off, losing much of its gains. My colleague Nate Elliott tells me this was a whole lot of profit grabbing. I can see that. But the sell-off continued because, according to the business press and traders’ message boards, shareholders were a bit disappointed. They anticipated not that the company would meet estimates, but exceed them. In a sense, Yahoo didn’t meet expectations… at least not the inflated ones held by those who set the Way-Back machine to 1999, when Internet companies routinely beat expectations. Not doing so in 2003 was a bit of a letdown.
The online advertising rebound is real. That is, the rebound of companies — publishers, advertisers, agencies, and other service providers — are correctly using the Internet’s technology to achieve advertising and business goals. What the stock market does with this news is beyond my scope of interest (for the purpose of this column, at any rate).
The Internet bubble didn’t burst because there wasn’t one. The “let’s make a whole bunch of cash with some poorly thought out ideas using the Internet” bubble burst. Stock indices have risen and fallen over the last several years, but some numbers have climbed: the number of people online, the number of households with Internet connections, the amount of time spent online, the amount of traffic, and the amount of email sent.
All of that creates a good, healthy environment in which a rebound can occur. What’s making the rebound actually happen and gain momentum is an alignment of priorities between publishers and advertisers. A few examples:
I’m not a stock-market analyst, so I can’t offer advice on which company’s shares to buy or sell. Those who watch Internet advertising are only concerned with catching short-term profits from company movements. They’re not in the best position to determine if a rebound is happening. This space was created (out of thin air, really) from within. It’s from within any growth will occur.
Meet Gary at the Jupiter ClickZ Advertising Forum in New York City on July 30 and 31.