To: Mark Fowler who wrote (39724 ) 2/12/1999 2:56:00 PM From: Rob S. Read Replies (1) | Respond to
I disagree. It is likely YHOO will rebound some, maybe back up to the 175 range where it could spend 2-3 weeks but the motivating factors for the great move up have dissipated. Yahoo and other portals will face increased competition and early market saturation that will lead to pressure on ad revenues. Up until recently it has been a sellers market - if you've got the page hits you've been able to sell all the ad banners the public can stomach. But the click-through rates have been dropping and dropping and buy-through rates once people have landed on a site have dropped as well. The bottom line is that Internet advertising is becoming increasing diluted and less valuable per view. Traffic will continue to expand, but at a slower rate than we have seen in the past. Slower growth, more competition, less effectiveness (the novelty effect has started to wear off), and more awareness of how ad revenues are spent will start to put some pressure on Yahoo. Yahoo must continue to spend heavily to equip itself more as a media company than a sophisticated search engine. Others offer more effective search capabilities and formatting in many parts of the information market.
