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Yahoo Inc. reported late Tuesday that third-quarter profit fell 37%, as higher advertising sales at its collection of Internet sites weren't enough to offset stock options costs and higher expenses.
Yahoo also said its board of directors has authorized the company to repurchase up to $3 billion worth of its common stock over the next five years. It's the second time in 19 months that the company announced a $3 billion share buyback plan.
The Sunnyvale, Calif.-based company said net income for the three months ended in September fell to $158.5 million, or 11 cents a share, from $253.8 million, or 17 cents, a year ago, when Yahoo, like most technology companies, didn't include option costs on its income statement.
Net sales are up, but profit is down. I wonder if they expect that the new system will mean that computers now look at the ads rather than someone in a cubicle, thus increasing their margin by ridding themselves of those pesky labor costs?
[edited by: engine at 11:26 am (utc) on Oct. 18, 2006]
Panama doesn't scare me. So they'll have a computer look at the ads instead of a person. Big deal. And the ranking order might be different. I can live with that.
The big problem with Yahoo (I say this as an advertiser) is the horrible affiliates they have taken aboard. That's a good part of the reason the prices on YSM are dropping in some markets.
I secound this ststement without a doubt it has caused them problems.
I don't need a pm if you have seen some of the worthless logs and gone to the garbage sites and then ask yourself how in the world would somebody find this junk 1 time but over and over.
Impossible............
The big problem with Yahoo (I say this as an advertiser) is the horrible affiliates they have taken aboard. That's a good part of the reason the prices on YSM are dropping in some markets.
Others have said this before, but I am hoping the more it gets posted the more Yahoo might listen up. Every person that I talk to seems to have a similar story with Yahoo/Overture. They all seem to be drastically lowering their bids or dropping Yahoo altogether. They ALL reference lousy performance. Where by Yahoo, for more money per click can not deliver even 1/10th the sales or leads that Google does. We all know
I recently got the Panama WebEx preview, and it appears to be a nicer, new interface, which is a great step toward making it easier to manage my ads, however I don't see Panama fixing this problem until they give advertisers the option to exclude sites and/or networks.
Furthermore, Yahoo, you NEED TO DROP many of these sketchy distribution partners... helping them improve the quality of their traffic is not enough- which is the story I got from one Yahoo rep at a recent ecommerce trade show.
Their search partners are garbage and anyone willing to pay them money for bogus clicks..well hey..more power to you
Why blame the affiliate sites? Bid less, it's a free market. If your competitors can't make a profit they'll do the same and you'll all be happy.
Ok, not a bad point, however there needs to be more regulation on Yahoo’s part, it’s their brand and reputation. The proof is there, advertisers don’t mind bidding more for less, yet better quality traffic. Advertisers do mind poor quality traffic, it’s a waste of their time, besides, what some these affiliates do most certainly borders on click fraud.
They simply would not believe that we did not know how bad the traffic would be. I do not take any chances any more.
Amen. Their sales pitch here was "we have 15 search partners" and I'm like why? There are only three search engines and you're 1 one of them. :)
Our relationship with the local subsidiary just broke down after we refused to accept that spending about US$100 a day without sales was normal, while we spent $3/ sale on google for the same term.
I was just about to cancel our account and drop them like a hot potato, but then I realised that on average (content and search networks) Yahoo has the same eventual cost-per-action as Google has for just the search network.
In short, this means that if we could opt-out of the Yahoo 'partners', the cost-per-action from Yahoo would be far better than Google. However, the utter rubbishness of the Yahoo 'partners' means that the average is dragged down.
Personally, I'm happy to drop Yahoo as soon as their cost-per-action drops below Google's, purely so that I never have to use their terrible ad management interface!
Can you be more specific, without breaking the TOS?
Take a VERY successful (and legally questionable) music/movie download site and slap random high value text ads on it (knowing that the tech savvy users will click occasionally to support the running of the site). Source the adverts from several 'search partners' to reduce the amount of clicks going through each account (since many search partners have 'networks' of their own and are only too happy to take any traffic). Know that these search partners are unlikely to be dumped by the originator of the adverts, if they are dumped there are plenty more to move on to. Be prepared for the gravy train to stop at some point (but know that one network - not neccessarily tied to aone of the big 3 - will still take you through desperation)
We have had first hand experience of the 'networks' that can grow under one questionable partner, leading to many branches on the click fraud tree.
A major problem for Yahoo, or any PPC network, is that once you allow 'search partners' you need to keep a good eye on them, and that also means keeping a good eye on how they keep an eye on their 'partners' etc...
We've seen a lot of eye-popping stuff because we are very close to one of the better Yahoo search parners, and in fact a partner of theirs (making us 2 steps away from Yahoo). We monitor things with almost a religious enthusiasm (and we don't have any partners of our own to look after) and because of this have been asked to help identify click fraud on a small part of the Yahoo 'search partner' network (which is very time consuming given the amount of techniques employed).
It's a complex problem with what should be a simple solution. Each direct partner should be responsible for fraud on their downstream network, if they can't control it then they should be dumped. The problem with this is that, contractually, it is difficult to do (as often the proof is hard to find several layers down).
Maybe Yahoo should take the monetary savings it's making from reducing human input into YSM reviews and employ more click fraud experts to root out the bad apples.
Correct, that's the problem that I was trying to get over.
As for Yahoo employees looking over every site (or more often than not, network of sites operated by the applying entity), it just does not happen. It certainly does on the direct partners of Yahoo, it probably does on the initial sites for partners of partners (remembering that new sites can appear at any time), but beyond that is pushing it.
A specific example of this is we launched a new site just yesterday (our first new site for around a year), it already carries YSM adverts (which will only make up 5% of earnings from the site - and there isn't any traffic to talk about at the moment) and I'm certain that Yahoo have not manually reviewed it. There is no problem with this new site as we are completely above board but once you are accepted (and hence trusted) there may be temptations for some to turn to the dark side.
The main problem may not be from hard-up publishers turning rouge; it's more likely to come from wolves in sheep's clothing. People appearing legit with a site or two initially, then adding their other sites later.
Even worse is the temptation to create pseudo ppc networks which then go on to get traffic from anywhere (think paid to browse), have you ever wondered how such dodgy places show adverts that come from much bigger networks?
If every level gets just a little bit dodgier, it doesn't take long for fraud to kick in.
If your business partner committing a fraud and you know about it and share the profits. Aren't you guilty of fraud?
I also agree it seems they chose to turn a blind eye to what should amount to fraud concerning their 'partners'.
They've got nothing to do now but try to sucker newbie advertisers - all the experienced ones (who spent big $$$) have left them.
my Y advertising is at an all time low, and i'm not alone.
i won't run ads in a ghetto, they don't pay a return.
If you do ANY kind of tracking on your PPC traffic it's almost amusing what you will find.
Yahoo is supposed to be the second largest search engine, yet "partner" sites that I have NEVER heard of and are completely irrelevant to my niche would often outdeliver Yahoo itself on traffic by a factor of 10 or more. Then you take a look at conversions and maybe 1 in 1000 visitors would convert from most partner sites where my average conversion is 1 or 2 for every 10 visitors?
As I said...it's "almost" humerous.
[edited by: SchoolChum at 8:03 pm (utc) on Oct. 20, 2006]
Yahoo doesn't allow you to block ad partners,
What's even worse for me is that I'm getting clicks from places I don't want with my US account. I had to disable another keyword yesterday because a parked domain type in suddenly started getting clicks from South America. All links on this site are Yahoo paid links. I only have search activated.
Does anyone know if the new interface will allow geotargeting? I would bet not as they seem to be oblivious to the fact that their search links are being splashed all over the world.
