Posted January 27, 2011 12:12 am by with 1 comment

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They thought it wouldn’t happen, but the folks at Yahoo! (and many others) got a happy surprise when they totaled up the balance sheets for Q4 2010. Turns out they saw a 16% increase in display ad revenue, popping them up from $465 to $567 million dollars.

Unfortunately, the spike did nothing to help the 600 people that got pink slips in December. It’s also too little, too late for the additional 1% which are expected to be let go in the coming months.

The trouble lies in the fact that even though display rose, search ad revenues dropped 18%. Overall, the company was down 4% in total revenue over last year and that’s enough to hurt.

Yahoo! is blaming the drop on outside forces. Says ClickZ,

The firm attributed the drop to revenue share paid to Microsoft, in addition to $27 million lost through the discontinuation of its paid inclusion ad product, and the sale of HotJobs and e-mail firm Zimbra.

It would be nice if this rise in display dollars was a sign of continued growth in the online ad economy but is it likely? Is it likely for Yahoo!? Though the old school internet company is still number one in display advertising, they’ve got Google and Facebook bearing down on them in their rear view mirror.

Chief Financial Officer Tim Morse told Reuters that he wasn’t concerned about Facebook.

“All impressions aren’t created equal. With the big customers and branded advertisers, and the premium dollars being spent, we really aren’t seeing that kind of competition.”

When asked if there could be more layoffs in the future, Morse played it safe with a non-committal response.

“Over the next few years, there will definitely be some more people who leave, there will be more people who are hired.”

That there is what you call, a definite maybe.

  • Mo

    This year’s holy grail will be helping people make sense of their social graphs. The most powerful tool out there that could make that happen is Delicious, which is owned by Yahoo. Facebook has groups. Twitter has lists. Youtube and LinkedIn don’t have anything.

    It seems Delicious could be modified to help people tag their social connections and provide them with central place to sort and search them. If they don’t figure out a way to make that happen this year, I will.

    They probably let go the few people that could have figured that out.