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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST
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To: memflyken2 who wrote (19028)1/24/1999 1:38:00 AM
From: jpbrody   of 27307
 
Memfly, great point about the advertising age article. (It's online at adage.com for free, but you have to register.) The article says that P&G has mad an offer of $5 CPM take it or leave it, but that so far web sites aren't taking it.

I'm with you on the argument that the CPM rate is going to have to fall. I believe the only thing keeping it up at the moment are internet companies who are advertising like mad to build traffic before their IPOs. It's all kind of funny money (I bet a good chunk of Yahoo's revenues are coming either from IPO money or VC money like softbank.) I won't be convinced that the price can hold until we see what the big advertisers (Coca Cola, Budweiser, P&G) will pay for it.

And for those who thing that banner ads aren't the only income, you're right. But guess what, e-commerce deals pay even less. Amazon figured this out quickly. They curtailed their banner ads and started their associates program (where they pay a commission if a click-through leads to a sale.) If you run a web site, you can expect to earn less than 5 cents/clickthrough via amazon's program. For banner ads, clickthrough rates are less than 1%, so rather than spending the $50 cpm and getting 10 clickthroughs ($5 per clickthrough) like in the old days, amazon only pays 5 cents/clickthrough. Even better for amazon, is that the e-commerce deals are paid AFTER the sale. Banner ads are prepaid. Big difference.

--
Jim
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