Yahoo! Blames Falling Adspend for Disappointing Forecast

11 January 2001

Yahoo!, the most profitable internet company on the surface of the planet, yesterday blamed a slowdown in online advertising for its pessimistic forecasts for the year ahead.

The portal predicted that 2001 will see its earnings fall from 48 cents per share to 33–43 cents and its revenue growth plummet from 88% to 9%–18%, despite revenues rising to $1.2-$1.3billion from last year’s $1.1bn.

Explained chairman and chief executive Tim Koogle: “This will be a transition year as we move our customer base from pure play internet advertisers to more traditional advertisers”.

Yahoo! expects ad income, both from pure plays and traditional sources, to fall in the opening months of the year, but pick up again in the second half.

Although the economic downturn may also knock Yahoo!’s revenues, Koogle remained optimistic on the company’s potential to ride out any recession.

“There is a softening of the economy, but we can use that to take market share from our competitors,” he said. “We have a powerful franchise, the internet's importance is increasing and the near-term effect of softening economy is just that – short-term”.

News source: Financial Times