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Yahoo Sneezes, but No Real Signs Online Has Cold September 19, 2006

Posted by David Card in Media.
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Yahoo said online ad spending by auto and financial service companies slowed a bit recently. I confess: I haven’t heard much from marketers or agencies one way or another, but I try to be big picture rather than quarterly. Typically, Wall Street is confused, contradictory, or clueless:

One analyst says Yahoo is “highly exposed to online advertising, ” while another says it has “more exposure to traditional advertisers.” Gee, stop the presses. And while you’re at it, hurt me with traditional advertisers. Please. Over at Piper Jaffrey, Safa Rashtchy, though generally a bit too infatuated with Google, actually talks to advertisers regularly, so I’d tend to trust his take:

    Our discussions with a major auto advertising services firm suggests that there was a slowdown in new car launches in [the first and second quarters], which could have a modest impact on Yahoo’s [third quarter revenue]. That said, our discussion indicated that there should be a significant increase in new car launches in [the fourth quarter and early 2007] Hence, we believe the slowdown in auto advertising referenced by Yahoo is primarily a seasonal effect and we would expect a reacceleration in [the fourth quarter and first half of 2007]

The Journal’s news story mostly backs our big picture analysis that online advertising — both display and search — is fundamentally strong over the long term. I don’t have any faith whatsoever in the quoted “market research” firms’ ability to track anything on a quarterly basis. But that’s just me.

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