Yahoo is succeeding while others are failing with web advertising. We take a look at some of Yahoo's latest financials.
I am pessimistic on the web advertising business model that most Internet companies operate from. However, I am optimistic with the same model with Yahoo. The reason is that Yahoo has higher traffic than competitors and so it can charge higher ad rates. Yahoo has some of the highest rated and most liked sites on the Internet. First, Yahoo, is essentially the Yellow Pages of the Internet. If you want to get noticed, you need to be on Yahoo. Since this is so important, Yahoo can charge fees to speed up the process of getting listed. So Yahoo charges a fee of $199 for regular sites and $600 for adult related sites for the opportunity to have Yahoo personnel look at it within a week. Paying this money doesn't mean that you will get listed, but just that they will look at in within about a week. These fees can be very profitable for Yahoo and their aren't many other companies that can do this. Yahoo's other sites that receive allot of traffic and are highly rated are Yahoo Finance and Yahoo Mail. Sites like these give Yahoo the ability to charge higher ad rates than its competitors and as a result have made Yahoo profitable. On July 11, Yahoo posted quarterly revenues of $270 million and net income of $74million. Page views per day in June was up to a staggering 680 million!. That means Yahoo is doing about $million a day in sales and is getting about 1/2 cent per page view. And, Yahoo's ROE is 16% according to Yahoo Finance Profile and the company has no debt. The great thing that Yahoo has proved is that you can make money off of advertising on the Internet. Also, Yahoo has set examples for others to follow. Nearly all of their services are entirely free. We will see how the other companies hold up under Yahoo's advertising model. Most of the companies will probably not fair as well as Yahoo has. Only time will tell.
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