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Technology Stocks : Altaba Inc. (formerly Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: tonyt who wrote (16688)	1/1/1999 4:34:00 PM
From: marion (Hijacked)	Read Replies (2) \| Respond to of 27307

<<I'm not too familiar with Yahoo's ad contracts. How far out are they locked in? Are they subject to adjustment? How far in advance are they sold? (i.e. could they have been sold six months in advance, before the current internet boom?) --Tony>> This is from a Post I made on the Motley Fool, that explains about Yahoo advertising: I have done some research on Yahoo advertising and here are my thoughts and observations: 1) Yahoo has a wide variety of prices and structures for their advertising. here are the rates: yahoo.com 2) Yahoo also works with Link Exchange. le-express.com They sell Yahoo ad space in small dollars amounts. They also allow you to barter your ads. In other words, you advertise a Link Exchange member on your site, and they will advertise your web page on another Link Exchange members site. These companies include these amounts as revenues. Ever go to some really obscure web site and wonder how they got some company to advertise there? 3) If you look at the ad rates you will see a huge difference in the cost of advertising on Yahoo depending on where the ad runs. The cheapest is the e-mail page. (on an impression basis) The cost there is 47,058. for 10 million impressions. That works out to be less than 1/2 of a cent per impression, or 4.70 per 1,000 impressions. Now, if someone clicks on an ad, then Yahoo could make .10 to .25 cents per click through. That is why this talk about declining "click throughs" is so important. 4) Now if you want to advertise and just have your ad pop up randomly somewhere on Yahoo's site you can spend as little as $100.00 and buy 10,000 impressions. That would be a penny an impression, or 10.00 per CPM. 5) The finance area and the message boards are in the cheapest rate category. These appear to me the most popular areas on Yahoo. BTW, the Motley Fool charges more to advertise on their site than Yahoo does to advertise on its finance section. Rates on the other portals are comparable to Yahoo's, but it appears that most other sites are more expensive than the portals. That is why most magazines are not "general interest" anymore, but have targeted audiences. If you are selling fishing gear, you are more likely to want to run an ad in a fishing magazine. So a "Motley Fool" type site will always be able to charge more than a general interest site. 6) Yahoo is in the business of selling banner ads. What you see listed as "selling and marketing" expense on their financial statements, isn't just the cost of Yahoo promoting its own web site, the bulk of it is the cost of Yahoo running their sales offices. They have various sales offices inside and outside of United States. Just like magazines and newspapers do, they will need to seek out and maintain their customers. The cost of this isn't cheap. They are cold calling accounts and tele-marketing in order to get business. Keep in mind, that their employees only have a limited experience in this area since it's a whole new venture. 7) I check out Yahoo's advertising every few weeks. I click on various different areas to see who is advertising there etc. What I have noticed is that the majority are "web companies," garden.com; Amazon.com ; CD Now; etc. From time to time I see others advertise there, but they don't seem to stay. I saw a Walmart ad for a few weeks, but I never saw it again. 8) Advertisers are very results oriented. There is a misconception that they just throw money at anything. If you have a business, you are going to want to see a measurable result. Magazines have had years to establish their advertising clientele. They also are special interest and work to promote the customers product. I will show you an example: If you look at a woman's fashion magazine, you might not be sure what is the magazine content and what is the advertising. It's designed that way. The magazines editors will tell their readers that long black sleeveless dresses are the rage this season, because that is what their advertiser is selling. They also have very good demographics to give their advertiser. They know exactly who is reading their magazine. The names and addresses for the subscribers are legitimate, and they have specific breakdown also, on exactly where the magazine is sold from a newsstand. They can include a rip out coupon in the magazine that is coded, and they can know exactly that someone from a given area ripped out 1.00 off coupon and bought a box of Tide. Proctor & Gamble is one of the biggest advertisers in the country, and to date they have done little internet advertising. Unless they can be shown how it will sell a box of Tide, they won't use it. 9) In some ways the internet has big disadvantages from other areas. Advertising through postal mail is acceptable, spam is not. The ISP's don't even allow spam. The internet didn't start out as a commercial venture (unlike TV) so there will always be those that oppose and will attempt to limit how they see it used commercially. There are various privacy groups that are pushing for laws to limit what kind of information can be gathered from online users. Right now it is mostly voluntary. So its okay for my grocery store to track every single item I buy in a year, ( through the discount card) but they don't want an online company to know my zip code. 10) This month, Yahoo's market cap made it the 82 largest company in the United States. I have looked very closely at its business. Yahoo would have been a nice little business, but I wonder if we are now beyond that stage. The expectations that the Yahoo bulls have for this company, are not within Yahoo's grasp. I saw this happen with Netscape. Wall Street handed Netscape a huge market cap, without letting the company just grow at its own pace. It's like sending a 10 year old child to college, simply because you think they have potential. 11) In summary...to those that think I dislike Yahoo or their business model, that is not true. I am simply asking for specific information on how they can ever achieve the revenue needed to justify their current market cap. (I wrote previously on how they are limited in how much revenue they can generate through e-commerce) I think it has been the Yahoo bulls who haven't looked closely at the company. Based on what I see posted here and on other message boards, they don't even understand how Yahoo generates revenue. They just have some vague notion that the Internet is grand, and all things Internet will succeed, and anyone that questions can't imagine the future.