In the movie “Frequency,” a time travel movie where a son communicates with his dead father via a ham radio (thanks to the radio’s unique ability to communicate between people living thirty years apart), John Sullivan gives his dad some prophetic advice: Buy stock in Yahoo. While this was certainly a great idea at the time the movie was released (2000), this tip is likely past its prime. We all know that Yahoo is struggling a bit, but how bad is it?
Well, at SEO Consult, the case is examined. Yahoo has taken several big hits recently. Specifically:
* Yahoo handed over its advertising to Bing a long while back, forfeiting a major revenue stream.
* Yahoo handed over the development of its search engine algorithm to Bing as well, giving up control of their search results.
* The company just laid off something to the tune of 600 employees.
* We’ve been seeing some strange errors, including the infamous “thumbnail porn” — cough — glitch.
* The company is shutting down a huge number of their properties, including the popular Delicious.
But it’s not all looking terrible, truth to tell. Why?
* Yahoo saw a nice three percent market share lift in November searches, showing that the company is still standing strong.
* The company restructuring, while brutal, will put Yahoo in a position to focus on their successful properties, and will be shedding a lot of dead weight found in sites that are simply failing.
* By combining forces with Bing, Yahoo is less overshadowed by Google. Bingahoo now makes up about a quarter of web searches, and is garnering more attention from users and optimizers.
* Since they’re no longer tending their search engine algorithm or ads, Yahoo will be able to devote all its resources to unique features that may just draw users to the site.
So, is now the time to buy Yahoo stock? Probably not. But you shouldn’t count them out just yet.
Just to clarify, Yahoo has only given up a portion of it’s search advertising business to Microsoft (smaller businesses). They still, however, retain a portion of their bigger clientele on the search advertising side. Yahoo did not give up it’s display advertising business which accounts for the larger portion of advertising sales in the company and it still leads the market in display.
There’s a lot going on with Yahoo! and it looks like the light at the end of the tunnel may be in sight for them. The media tends to make the situation sound a lot worse than it actually is because it garners them readership. I chose not to jump on the Yahoo fail bandwagon and I’m rooting for them to return to their former glory.