Blog Post

For Yahoo, momentum, not management, a problem

The trials and tribulations of the Yahoo executive suite have been well chronicled in the media off late: from the recent exit of their sales ace to Terry Semel being replaced by co-founder Jerry Yang, as the top man on the totem pole. The management shuffle aside, Yahoo has a bigger problem on its hand: the traffic, be it search or total visits is beginning to resemble New York Yankees in the Major League Baseball rankings.

Folks from Citibank analyzed the data collected by comScore, and found that Yahoo has started to lose ground to Google in terms of total visitors. [digg=http://digg.com/tech_news/Yahoo_is_Dying]

The total number of visitors to various Google properties was up 18% (year-over-year comparison) to 536 million, with Microsoft getting 528 million (up 5%), and Yahoo being #3 with an actual decline – about 2% (year-over year comparison) in the number of monthly visitors to 470 million. This is the second month of consecutive declines for Yahoo.

To put things in context, the worldwide Internet traffic grew 9% in the month of May 2007, while US saw a 3% increase in the traffic for the month. In US, Yahoo remains #1 with 131 million visitors, up 0.3%, the lowest we have tracked. Google is at #3 position with 120 million unique visitors, up 15% year-over-year.

Chart of traffic growth

Like most, I do feel that comScore and its methodology leave a lot to be desired, though they are a good trend-indicator. The trends don’t bode well for Yahoo. If monthly unique visitors page views are (flat to) down, then this could (indirectly) impact Yahoo’s bread-and-butter brand & display advertising business, as the company indicated in their most recent chat with the analysts. (Maybe Wanda Harris Millard, the outgoing Yahoo sales ace was robbed of her job.)

Yahoo has already lost the search battle and is losing the mindshare as well. It trails in mobile search business as well. In mobile space, M:Metrics reports that smart phone users prefer Google over Yahoo when it comes to mobile services, especially in US and UK, where Google commands 62.5% and 31% reach. Yahoo in comparison has about 33.5% and 11% reach respectively.

In an increasingly competitive marketplace, Yahoo seems to be losing momentum, especially in areas where it has been traditionally strong. It is going to be a long slog for Jerry Yang and his crew before Yahoo is restored to its growing ways – it that is at all possible.

Update: Mappingtheweb has another interesting take on Yahoo’s current state of affairs.

18 Responses to “For Yahoo, momentum, not management, a problem”

  1. I like Slavito’s comments because it gives a great perspective about Yahoo vs. Google from the user perspective.

    Yahoo’s doorway is cluttered with nonsense. Half the time when I need to search for something, I won’t go to Yahoo. I need a simple search vs. seeing Paris Hilton’s un-makeup’d face when I go to do a search. Do I care about P.Hilton…no!, but the image and news gives me enough pause to sometimes forget what I was going to orginally look for.

    This is exactly why I use Google for my search, email, and news aggregation. It’s easier, more useful to my daily activities and doesn’t present distractions.

  2. yahoo will do what every large media company with momentum troubles has done in the past – it will try to buy it’s way out of the problem. my bet is this will be resolved for better or worse at the transactional level.

  3. Anonymous

    I don’t think Yahoo’s search is worse than Google. It just has a different view on which of the billions of pages it should present.

    I mostly use Google for most searches. But when I’m looking for information about a subject, I often use both of them because they both contain relevant sites but at different positions.

    Most people I’ve heard that says Yahoo has less relevant results are either people who used their old search engine, or those who thinks Google’s rating is the only one that matters. You can’t expect both search engines to give identical results.

    Try a search on http://www.langreiter.com/exec/yahoo-vs-google.html and see the differences

  4. I’ve always been wondering if people wanted to stop for a second and compare the two homepages – Google’s and Yahoo’s.

    Which one would you rather start your day with – the one that takes almost 5 seconds to load (cable modem, with the newest Firefox), greets you with a big ad on the right-hand side, a whole “marketplace” section down the center, not to forget a “sponsored offer” line at the very top and a handful of idiotic celebrity stories or the one that takes one second to load and lay out and has no ads?

    Has something that simple ever enter Yahoo’s execs’ minds? That may be (just may be) their homepage, and by extension, their brand sucks and more people are starting to realize that?

  5. google’s slowly but steadily catching up it seems. i suppose its got to do with its roots. it has got it wide and deep, as compared to yahoo’s. back some time, i still thought yahoo ruled. but.. as the dotcom game always goes, extreme fluidity persists in this industry.

    who knows what’s gonna happen next.

    best regards!

  6. These are unique visitor numbers – not page views. that was one of the reasons i stayed away from the page view metric.

    The argument is not the page views, but stagnation is overall number of users. As the numbers stall, the page views have to go up substantially in order to make up for the loss/deferred revenues.

  7. Wouldn’t the decline in Yahoo page views have a lot to do with them finally rolling out the new version of Yahoo Mail which is heavily AJAX based and therefore requires very few page reloads?