Following the announcement of 10 percent cut in its roughly 1,500-member workforce and its anemic 1 percent revenue growth. CEO Jerry Yang introduced the call by saying Yahoo (NSDQ: YHOO) saw “mixed trends” in Q3: while there was strong growth in search and display, though U.S. saw display weakness in ad categories like finance. Europe and Asia. Other ad-related highlights from the call:
–Google (NSDQ: GOOG) pact not dead yet: Yang: Yahoo and Google are continuing to work with the Department of Justice, which is examining the pact for antitrust issues. We look forward to bringing this pro-competitive agreement to the market. While the ad market goes through this downcycle, online advertising will benefit.
– Pain and gain from market volatility: Sue Decker, Yahoo’s president, then came on to address the impact of the global financial crisis. She reiterated the higher usage brought by the twists in the financial markets, but noted the weaker performance in premium display. In addition APT, Decker focused on audience trends and monetization products. Growth in display and search queries in general were up in the double digits.
– Another redesign?: While it was barely a year ago that Yahoo redesigned its homepage, Decker insisted that the company is going much deeper this time and that this shouldn’t be considered yet another redesign. Decker: “We are embracing more open and social features, that will make the site more relevant. we will continue organize spending around new tools like APT, the company’s ad targeting and display delivery system. The Social Profile will be leveraged across several forthcoming products. We’re also testing ways to serve more targeted content. We’re changing from a one-stop portal model, but to a starting point for the rest of the web.” More after the jump
– Display woes: Guaranteed volume and pricing — i.e., premium display — were perceptively weaker, resulting in a deceleration in display. O&O display was up 3 percent in Q3. In Q307, the same category had year-over-year gains of 21 percent, a considerable difference. Search, which is a smaller part of Yahoo’s business, was up 17 percent. Decker: Slower growth is expected in Q4, but we’re hearing from media buyers who consolidating their ad budgets around larger brands like Yahoo. We’ve also seen more demand for performance display. There is a weakening trend in Asian markets for display, but in general, international remained strong. We’re seeing cancellations in categories like travel, but we are seeing some advertisers increase their budgets.
– Losing share to ad nets?: JP Morgan internet analyst Imran Khan asked how much of the meager 3 percent display growth was to do general economic forces and how much was caused by ad nets cutting into Yahoo’s ad business. Decker: Until other other companies report, we won’t exactly know how much was due to the wider economy and how much was related to the growth of ad networks. That said, looking over the last few quarters, we have reason to believe that we’ve been growing much more strongly than them. As I’ve said, the performance piece of display grew in the double digits for us. That gives us confidence versus our competitors.
– On APT: Good order flow operation in just the first month, and orders are strong for the rest of the year. APT can take advantage of the growth in performance display.
– During the Q&A, Decker was asked what Yahoo is doing to improve its O&O marketing position. The answer, mainly, is to move more Yahoo inventory into the APT platform. On the affiliate revenue side, Blake Jorgensen, the CFO, said that the company expects . Asked about the mix between performance and premium, Decker said that Yahoo’s biggest business is in the latter, but the growth is in the former. Premium prices were down to flat, while performance was up strongly.