The once powerful Yahoo, just reported a decline in net income of 5% for Q4. Recently, Yahoo invested a lot of money and effort into raising the quality of its content. That gave them the title of the “most trafficked news site on the web,” but apparently that didn’t help their bottom line.
A large part of the problem is the drop in their display advertising business. This used to be the jewel in the crown for Yahoo, but now they’re down 4% quarter over quarter.
In general, display advertising is on the rise. eMarketer’s numbers show a 24.5% increase in ad dollars over last year. Unfortunately, the competition is benefiting from the rise, not Yahoo. Google and Facebook are taking the lead, but why? How did Yahoo go from being the top site for display ads to third place?
It feels like Yahoo is going the way of AOL. Out with the old, in with the new. That leaves us with a two-horse race and that’s not good for marketers or consumers.
With Google and Facebook increasingly out distancing themselves from the pack, is it even possible for Yahoo to get back in the race? Or will it be Google or Facebook for the win from now on in?