{"id":224,"date":"2006-01-18T10:49:04","date_gmt":"2006-01-18T17:49:04","guid":{"rendered":"https:\/\/www.roughtype.com\/wp\/?p=224"},"modified":"2006-01-18T10:49:04","modified_gmt":"2006-01-18T17:49:04","slug":"yahoo_passes_a","status":"publish","type":"post","link":"https:\/\/www.roughtype.com\/?p=224","title":{"rendered":"Yahoo passes a stone"},"content":{"rendered":"

I had thought the big internet news yesterday was the announcement that the online casino GoldenPalace.com had bought William Shatner’s kidney stone<\/a> for $25,000. But Yahoo’s earnings shortfall seems to have trumped Captain Kirk’s offal windfall.<\/p>\n

Yahoo reported strong growth throughout its business, but it came up a penny short of Wall Street’s expectations on its earnings-per-share number. Given that Wall Street’s real expectation was that Yahoo would beat Wall Street’s expectations (got that?), the shortfall is causing a big fall in Yahoo’s stock this morning, as well as collateral damage to Google and other internet stocks. What’s probably making investors more antsy than that missing penny, though, is Yahoo’s admission that it’s having trouble “monetizing” its search results. Facing fierce competition from Google, and impending competition from Microsoft’s MSN network, its profit margin in paid search appears to be getting squeezed. The increasing competition in the online ad market means, moreover, that the squeeze will probably get worse. Reported<\/a> the New York Times: “In forecasting a slowdown in growth, the company said it would have to give other Web sites a greater share of the money it took in from selling ads on their sites.”<\/p>\n

Steve Rubell sees the Google results as heralding a Web 2.0 crash<\/a>: Sell Google, he says, and “if you’re a start-up hoping to pin your business on advertising, get to higher ground.” Wall Street seems to have some sympathy for Rubell’s view, as two analysts<\/a> have already cut their ratings on Google to “sell.” Business 2.0’s Owen Thomas, though, says the fears are overblown. He sees<\/a> in Yahoo’s numbers a confirmation that the skies ahead are still a cloudless blue. According to Thomas, “nothing in Yahoo’s earnings suggested that the company’s strategy or execution is off course, save for the trouble with search monetization.” Then again, investors’ enthusiasm for Web 2.0 is largely built on rosy scenarios about pay-per-click advertising, so “trouble in search monetization” is, well, trouble. The question is: Is this a blip or a trend<\/a>?<\/p>\n

In describing his very expensive kidney stone yesterday, Shatner said, “If you subjected it to extreme heat, it might turn out to be a diamond.” Or was he talking about Web 2.0?<\/p>\n","protected":false},"excerpt":{"rendered":"

I had thought the big internet news yesterday was the announcement that the online casino GoldenPalace.com had bought William Shatner’s kidney stone for $25,000. But Yahoo’s earnings shortfall seems to have trumped Captain Kirk’s offal windfall. Yahoo reported strong growth throughout its business, but it came up a penny short of Wall Street’s expectations on […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-224","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/224","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=224"}],"version-history":[{"count":0,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/224\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=224"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=224"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=224"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}