Yahoo! to Rely on Advertising for Next Three Years, Despite E-commerce Growth

Strategic Insights -

As Internet company Yahoo! celebrates its one-year presence in Australia, its chief operating officer, Jeffrey Mallett, has revealed that the company will continue to rely on advertising as its primary source of revenue in the next three years. With a market value of $US6.09 billion and 45 million unique users worldwide, Yahoo! has become the largest Internet company, measured by revenue and user base. Mallett attributes the company's success to the strength of its brand, which has been built solely via the Internet and word of mouth.

Key Takeaways:

  • Yahoo! will continue to rely on advertising as its primary source of revenue for the next three years, despite the growth of e-commerce.
  • The company has attracted 160 advertisers in Australia, with its US parent gaining 2000 advertisers in the last quarter, producing revenue of $US40 million ($69 million).
  • In the last quarter, 26% of Yahoo!'s $US41 million revenues were commerce-related, but were largely from merchants' fees to establish a permanent location with Yahoo!.
  • Yahoo!'s brand has been built solely via the Internet and word of mouth, and is now valued at 150 times earnings.
  • The company is planning to expand its e-commerce capabilities by launching voice-enabled chat services and linking into manufacturers' databases.
  • Mainstream advertisers such as Coles Myer, Nestle, and Mars are starting to take notice of the Internet's potential as a successful medium.

Statistics:

  • Yahoo! has attracted 160 advertisers in Australia.
  • Its US parent gained 2000 advertisers in the last quarter.
  • Yahoo!'s revenue for the last quarter was $US41 million.
  • 26% of Yahoo!'s revenue for the last quarter was commerce-related.
  • The company's market value is $US6.09 billion.
  • Yahoo! has 45 million unique users worldwide.
  • Yahoo!'s brand is valued at 150 times earnings.

Sources:

  • "Yahoo! chief speaks at Internet World conference" by Antony Clavell, The Australian (no date)
  • "Yahoo!'s Mallett says e-commerce traffic growing" by Antony Clavell, The Australian (no date)
  • "Yahoo!'s Mallett says Internet advertising will remain key revenue stream" by Antony Clavell, The Australian (no date)