Investors Get Double Blow from Yahoo



According to the AP, Yahoo managed to meet analysts expectations for Q2 but revealed their new interface for paid search ads would be delayed.

A delay in launching a platform, that investors had hoped would drive up revenues, and quarterly earnings down nearly 80% compared to the same quarter in 2005, left Yahoo’s stock price with nowhere to go but down.

Investors have been eagerly awaiting the new ad platform, hoping the improvements would enable Yahoo to do a better job displaying short ads for Yahoo’s audiences to click. The clicks on those ads, which typically appear as text on the top and sides of Web pages, are critical because they trigger commissions for Yahoo and its partners.

ClickZ picks-up the story and reveals a little more on why the new ad platform will not likely launch until Q4.

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.”

In its conference call, Yahoo also revealed they have been actively monitoring instances 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.

All eyes turn to Google. If Google remains flat, we’ll know it’s a trend across the industry. If the bust-out, Yahoo could be in more trouble.