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Ya-boo-hoo! by Mahesh Pillai – GCMBA07 Alumn

On Tuesday Yahoo’s stock [1] on Nasdaq fell nearly 14% to its 52 week low. This was partly due to the second quarter earnings that were announced the same day. The report [2] showed that second-quarter profit met Wall Street expectations but revenue was slightly below forecasts. A bigger reason for the fall of the stock was the news that launch of the much awaited new advertising platform is postponed to the 4th quarter instead of the 3rd quarter as previously planned.
These developments beg the question as to where Yahoo! is headed. Even as early as 2001, they were far ahead of its competitors in terms of exploring new ways of online content management and advertising. Yahoo! had plans of launching a web-based office application suite combined with online file storage capabilities that can be accessed from anywhere in the world. The web-based office suite never really took off and now Google, with its acquisition of Writely is showing clear signs of launching a similar service. On the online file storage front, Yahoo! did launch Yahoo Briefcase, but it did not take off in popularity as was expected.
According to ACNielsen, web traffic on Yahoo sites rose by 9% in the second quarter year-over-year making it the most visited site on the internet. Even though Yahoo! gets more page hits than a site like Google, Google is making way more money out of those hits. With rising popularity among the younger generation of websites like myspace.com and youtube.com, it remains to be seen how Yahoo! can convert its ideas into reality and monetize them.