Thu Jul, 2011 by Derek Mehraban
For the second quarter in a row, Yahoo!’s revenue continued to fall. Industry wide spending on display advertising is up, but Yahoo! has such little share compared to Google and FaceBook that it is unable to mount growth in digital advertising revenue. Part of the blame rests on the contract Yahoo! Inked with Microsoft’s Bing. While Yahoo! is still turning a profit, some see this a sign that the internet portal has not fixed its problems and is still against the ropes.
The digital agency can take either an optimistic and pessimistic look at this development. Yahoo! will be eager to fix this and might be looking to discount its costs to attract more business. Yahoo! could also be forced to look into other areas for developments and improvements in an attempt to attract more users. Both of these move would increase the digital agency’s ROI when partnered with Yahoo!. This could also, however, be bad news as it signals an increasingly consolidated ad serving industry, leaving fewer options for the digital agency.