Former Tinseltowner Terry Semel announced that Yahoo!, the one-time giant of the Internet, is still having serious problems – and they aren’t ending anytime soon.
The company reported a tiny second-quarter profit, beating The Street by 1 cent, but declining revenues, thanks to the loss of dot-com ads. And revenues are likely to continue dropping in coming quarters, they company said.
In response to a question about why Yahoo!’s ad business was hurting when AOL’s apparently was not, Semel told a conference call his company had relied more heavily on dot-com clients – 555 of which have gone out of business.
“I’d say the worst is over in the ad market by now,” said Brean Murray analyst Kathleen Heaney, who rates the stock a “buy.”
John Corcoran, CIBC World Markets analyst, said, “They won’t make much money with niche offerings like online photos. They need to exploit their big footprint with the Launch purchase and this alliance with Pressplay [the online music system].”
Semel toed the Tim Koogle line that Yahoo! was a leader in personalization and would benefit from people customizing the service, such as tailoring the music they listen to or the stock quotes they fetch. “People who spend the most time on Yahoo! also spend the most money [online],” he said.