Yahoo shares lowest in five years
By Alisa Zykova, Thursday 9 October 2008 at 23:51 :: General :: #2430 :: rss
Yahoo Inc.’s shares fell to their lowest level in five years on Wednesday due to a slowdown in core advertising, the San Jose Mercury News reported Thursday. The Internet firm’s shares dropped nearly 6 percent, closing at US$13.80 after being down to $13.20 in the morning.
Susquehanna Financial Group analyst Marianne Wolk predicted that there is a risk that the Yahoo-Google ad deal may not go through, as a result of Yahoo’s “deteriorating fundamentals.” The two sides said they are delaying the venture, which would have permitted Google to sell ads on Yahoo sites in North America.
The deal with Google would have added between $250 million and $450 million to Yahoo’s operating revenue during the first year after the deal closed, the Mercury News reported.
The agreement was proposed to ward off Microsoft from buying Yahoo’s search business, according to the Mercury News. However, Microsoft has said it does not intend to bid again, as CEO Steve Ballmer mentioned that instead the company would try and enter the search advertising market by itself.
Nonetheless, American Technology Research analyst Rob Sanderson pointed out Wednesday that he expected Microsoft to buy Yahoo in the future, but “for much less than the $32 a share it offered” in February this year, the Mercury News reported. Microsoft’s online ad sector “has not come close to meeting expectations,” he said. The company’s annual loss augmented to $2 billion between March and June.
Yahoo is predicted to reveal its third-quarter profits on October 21.
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