Emarketer Boosts Yahoo Revenue Estimate as Ad Gains SeenDouglas MacMillan
EMarketer Inc. raised its forecast for Yahoo! Inc.’s sales this year as renewed interest among advertisers in the largest U.S. Web portal slows market share losses to Google Inc. and Facebook Inc.
Yahoo’s U.S. advertising sales are projected to climb 3.2 percent to $3.18 billion in 2013, according to the New York-based researcher. That’s higher than the previous 2.2 percent growth rate estimated by EMarketer in August.
The uptick in Yahoo’s ad-revenue estimate is a sign that Chief Executive Officer Marissa Mayer is luring back marketers after ceding ground to hotter Web properties. The website’s U.S. ad sales rose 3.2 percent last year, after declining 8.4 percent in 2011. EMarketer, which compiles data from researchers and investment banks for its forecasts, said it hadn’t increased its estimates for Yahoo in more than a year.
“A 1 to 2 percent jump in expectations may not be as significant for a company growing as fast as Facebook or a company like Google,” Clark Fredricksen, vice president at EMarketer, said in an interview. “For a company that is trying to show it is turning itself around, there are signals that indicate Yahoo may be more than stopping the bleeding.”
Still, Yahoo will continue to lose ground in its core business of display advertising, where revenue will rise 1 percent, compared with the 2.2 percent growth predicted earlier, EMarketer said.
Yahoo’s share of the U.S. display-ad market will shrink to 7.7 percent this year, from 9 percent in 2012, EMarketer said. Google’s stake will rise to 18 percent from 15 percent, while Facebook will expand to 16 percent from 15 percent, according to the researcher’s estimates.
EMarketer lowered its projection for Yahoo’s display-ad revenue in part because of changes Mayer made to the website since she was hired last July, Fredricksen said. For example, a revamp of its online e-mail service in December stripped out some advertising in order to make it easier for users to get to their inboxes. Over time, such changes will probably let Yahoo charge higher rates for ads elsewhere on the site, Fredricksen said.
“Yahoo is trying to cut out the clutter,” he said. “They are trying to develop more premium inventory.”
In online search, an area where Mayer has said she hopes to regain share, Yahoo’s search-ad revenue will increase 7 percent in 2013, compared with EMarketer’s previous prediction for 6.1 percent.
In terms of search-market share, Yahoo will claim 6.2 percent this year, down from 6.5 percent in 2012. Google is projected to remain the dominant search engine, with 74 percent, while Microsoft has 9.3 percent.