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Wednesday, April 20, 2005

Yahoo! Surfs the Online Advertising Wave, Doubles First-Quarter Profit to $204m

Yahoo! doubles first-quarter profit.

Yahoo! powered by increase in online advertising doubled its first-quarter profit to $204m ($101m last year). Online (search) advertising accounted for 87% of Yahoo!'s first-quarter revenue.

"Advertising accounted for all but $149 million of Yahoo's revenue during the quarter."
2005 first-quarter revenue: $1.17b
2005 first-quarter advertising revenue: $1.02b

The potential of online advertising is tremendous. Once Yahoo! gets its Contextual Advertising experiments in place and starts competing with Google in the AdSense space it stands to gain even more.

I have been using Y!Q (Beta), Yahoo!'s contextual search for a month and I feel if Yahoo! provides web site owners a business model of using Y!Q on their sites and showing contextual ads (like Google AdSense) it will be a big hit as Y!Q results can be tailored 100% to the content on the page by using the input name="p" parameter. For example try the contextual search I've provided at the end of this post. It gives almost 100% matching results to the content of this post. Now if Yahoo! can show ads with these results it will give a big boost to their online advertising revenue.

Yahoo!'s contextual search (Y!Q) and related ads (if they plan to show) based on those results will be an innovative way of online contextual search advertising providing SMB web site owners a chance to display almost 100% related ads.


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