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Yahoo 1Q05 Earnings Call Highlights April 20, 2005

Posted by David Card in Media.
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Yahoo continues to fire on all cylinders. Details are here.

Ad revenues (less fees paid to network partners) were up 3% sequentially and 50% year over year to $672M. Fees and Listings (consumer and small business, Hotjobs and directories) were up 10% sequentially and 61% year to year to $149M. Yahoo no longer breaks out listings revenues from fees. Yahoo raised its overall guidance for 2006. Tidbits from the earnings call:

Advertising

– Gross revenues were $1.025B for the quarter, up 55% year to year
– Back in Q4, big advertiser branded spending was up 39% year to year; in Q1 it showed faster growth, though Yahoo did not give any more details
– International growth, especially in paid search, drove margins up
– Traditional seasonal strength in search, and some weakness in branded advertising. Yahoo expects that trend will reverse next quarter, which it says is also seasonally normal
– TAC expenses (paid search revenue sharing) were up a little more than 20%. Yahoo attributed that to very strong growth by its partners and to “a modest increase in rates” due to competition
– CPG and Financial Services had their best quarters ever, but that was the extent of category commentary
– Rich media showed “major growth,” but, again, Yahoo wouldn’t give details
– Yahoo refused to comment on dollars per search or click through rates or any of the traditional paid search metrics. It says the averages are too dependent on changes in mix: new advertisers coming onboard with a different collection of keywords, seasonality, etc.

Paid Content & Services (Fees & Listings)

– 176M active registered users, up 25% year to year
– 8.9M paid relationships, up 500K from the previous quarter and up 3.1M year to year. Yahoo said this was above expectations, as Q1 usually sees an overall drop-off due to the end of Fantasy Football
– Biggest category in paid relationships remains access bundles with SBC and Rogers Cable in Canada. Small Business showed “particularly strong growth”
– Yahoo is still building the Verizon product; it should launch in the summertime
– HotJobs had double digit growth. Yahoo claimed it wasn’t burying listings in fees to cover anything up, i.e., there were no material differences in listings business trends
– Yahoo delayed its re-launch of Music (Musicmatch), in order to “add features.” Yahoo Music will re-launch in early summer, with a big marketing budget. If my math is correct, Yahoo expects up to $15M of incremental Music revenues in Q2
– Paid subscriber count target for 2005 is at the high end of previous outlook of 11 to 11.5M total, possibly even 12M (2.6 to 3.1M net adds); $3-$4 per subscription average guidance is a tiny bit lower than the $3-$5 range Yahoo usually quotes

Yahoo said the re-launch of MyYahoo was a big success, but it didn’t break out the number of users. I estimate it’s still below 25% of total users, but that’s a pretty good number and better than most customization efforts. Yahoo said adding RSS to MyYahoo (and to News and mobile) was particularly successful. Success means increasing usage in terms of page views and number of Yahoo services per user.

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Egg on My Face April 13, 2005

Posted by David Card in Digital Home & Personal Tech.
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Well, that’s what I get for trying to get some PR by releasing a forecast the same day as Apple’s earnings call. Apple shipped 5.3 million iPods in calendar Q1, up 15% sequentially from a barnburner of a Q4. We’ll probably adjust the JupiterResearch near-term US MP3 player forecast yet again. Oops.

We still believe the 5-year outlook, and the basic trends. Ah, the hubris of trying to forecast a dynamic market dominated by a single company. $#@&!!

New Jupiter Music Device Forecast April 13, 2005

Posted by David Card in Digital Home & Personal Tech.
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As they say on Wall Street, the market outperformed our expectations, so we’ve raised our near-term forecast for US MP3 players. In fact, the iPod did so well, we doubled it. We’ve also revised our opinion on flash-based players, and think they’ll hit consumer sweet spots in terms of pricing and capacity in the 2007 time frame, when they’ll start outshipping hard drive-based models.

We still believe the five-year installed base will cross 50 million, but it will ramp up faster. In the out years, mobile phones that can play music will encroach on the space, but erode only a little of the low-end market. They aren’t likely to be most fans’ primary music device.

Press release here, forecast for paying customers here. Come talk to us about this and other digital music issues at our Executive Breakfast next week.

NYTimes Disses Usher? April 12, 2005

Posted by David Card in Media.
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I’m wondering if the editor is in on the joke. I saw this this morning, in the Times’ coverage of Mariah Carey’s would-be comeback, and delayed posting to see if it got fixed:

Mr. Reid, who has worked with divas from Whitney Houston and Toni Braxton to TLC and Usher, has said that Ms. Carey is his top priority.

I can’t wait to read the correction.

WSJ on Citizen Journalism April 11, 2005

Posted by David Card in Media.
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The Journal has a piece on “citizen journalism.” I have a report on prioritizing online local content (including listings, blogs, and community) in production. It should be posted soon. So far, there’s little evidence that consumer-written content or blogs are big traffic drivers or money-earners, but they’re relatively cheap.

Marketing to Teens Online April 7, 2005

Posted by David Card in Media.
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Some key findings from our latest online teen survey analysis:

– The Internet is not a panacea for reaching teens. They spend, on average, three hours less time online per week than adults, but watch just as much TV.

– Teens appear to be less responsive to online advertising than adults, and a little less likely to visit the sites of their favorite off-line media brands. Marketers should scale back performance metrics expectations for online campaigns targeted at teens.

– Twenty-nine percent of online teens carry a great deal of influence with both their friends and family, across a variety of product categories. These Teen Influencers are big consumers of media – both on and off-line – more responsive to advertising, and more likely to use media brands cross-media.

– Compared with adults, almost twice as many Teen Influencers cited word of mouth as the main way they find entertainment online. Adults were more likely to favor portals and newsletters. Teens spread the word among themselves, and a marketer’s objective should be to assist that process.

Just How Jeevesian Is Google? April 7, 2005

Posted by David Card in Marketing.
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Gary says:

New Google feature: Q&A. Ask a question such as when was Lance Armstrong born? and get an answer (1971).

Seems suspiciously Jeevesian to me. Not only the notion of asking a question, but also the best-guess direct answer, as opposed to a list of places where the answer may be found.

Yeah, but ask “How old is Lance Armstrong” on Google and you don’t get an “answer.” At Jeeves, you do. At least in the old days, Jeeves used to hard-codes this kind of stuff in with editors. Google probably hasn’t figured out how to teach the robots to do that, yet.

Too Much Faith in WSJ April 6, 2005

Posted by David Card in Media.
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That’s what I get for singing the praises of the Wall Street Journal. Today, it’s got a long story on behavioral targeting that doesn’t even mention Claria, even though it cites as a problem the difficulty of doing behavioral targeting across more than one site.

It doesn’t mention “spyware” either, which, I guess, is a blessing for the industry, if not for the reader trying to understand it. Sigh. Jupiter’s summary take.

USA Signs WWE, Sans Ads April 5, 2005

Posted by David Card in Media.
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More signs that one of my favorite media companies had better come up with something new. World Wrestling Entertainment’s new deal for “Raw” with USA Network – to replace the one that Spike TV dropped – signs over ad rights to USA. That’ll mean a big hit on WWE’s top and bottom lines.

Wrestling reigned for a dozen years. Will the poker fad last anywhere near that long?

And note how the Journal’s coverage gets to the heart of the matter, while the Washington Post’s TV column buries the important details on a jump page online.

WSJ Conquers Film Criticism April 4, 2005

Posted by David Card in Media.
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One of my favorite reviewers gets the Pulitzer. By writing for the Wall Street Journal, of all pubs. Regular readers may think I read only the Journal – not so. But it is my favorite daily. (Aside from the editorial page, of course.)

Congrats to Joe Morgenstern. Well deserved.

If for some reason, you’re curious: I also like Owen Gleiberman at Entertainment Weekly, David Edelstein at Slate, and Roger Ebert of the Chicago Sun-TImes, even though the former two started in Boston (as did I), and the latter two liked Sin City waaay too much.