Yahoo! - a stock I’ve owned for some time and seen ride the $22-34 train for seemingly ever, is down almost $1, to $23.
Why do I own the stock, I wonder. Sure, as the largest web property out there, with a barrage of brands including Flickr, Delicious, etc., I like its prospects. I also like its position as a diversified web play, but diversified means boring, if you ask investors. Reading this article off CNN Money, a few things stand out:
Yahoo (YHOO) is down 6 percent. Barry Diller’s Web conglomerate IAC (IACI), which owns search engine Ask.com, Citysearch and Match.com, has fallen 28 percent. The company plans to split into five entities next year. Shares of online news company CNET (CNET) are down 16 percent. Marchex (MCHX) , a company that specializes in local online advertising, has fallen 20 percent.
Then:
To be sure, Google not only is a big part of the industry, it is growing faster than most of its competitors. Google’s sales are expected to increase 41.6 percent in 2008 to $16.6 billion - and most of those sales are online-ad related. According to estimates from research firm eMarketer, overall online ad spending is expected to increase 28.5 percent in 2008 to $27.5 billion.
Wow. $16.6B / $27.5B = 60%. Of course, we’re comparing apples with oranges, the $27.5B figure is US-based, while the Google figure is likely global. CNN should clarify that.
Earlier this year, I ran the numbers which showed that in Q3, Google got 40% of all ad revenues…
Of course, the potential and promise of the Web is rosier than for any other medium:
“Because advertising on the Web is quantifiable, it seems like it’s the last thing to get cut,” Ominture CEO Joshua James told me recently. “Companies can see the returns. With other forms of advertising, people are guessing. That’s the part of marketing budgets that will get cut first.”
But still:
“Internet ads are now larger than Yellow Pages advertising and magazine advertising. Online advertising is a real industry,” CNET CEO Neil Ashe. “But the reality is none of us are bigger than the economy. If there is a slowdown, we’ll all feel it.”
Indeed. But I still think that any negative macro event would help the micro Web landscape. Read more on that here and here.
Subscribe: