Yahoo's suite of 35 international Web sites offer email, news, financial tools, social networking, photo sharing, personalized home pages, mapping, shopping and voice communications. Yahoo is the world's largest free email provider, with some 43% of the U.S. market compared to Google's 2.5%. The firm also dominates online finance controlling 35% of the American market compared to less than 1% for Google. Yahoo is also a respected player in major online news services with a 6% market share, more than triple that of Google.
So why has Yahoo's stock recently plunged more than 13% to about US$25.30, within 2% of its 52-week low of $24.91?
At a September 19 conference, company CFO Sue Decker told investors that third quarter sales would be about $1.1 billion, at the low end of the company's forecast in July and about 5% less than what analysts had expected. Decker blamed weak sales of financial and automotive ads during the last 4 weeks in September. Yahoo's stock price slid because some fear that Yahoo's recent online ad weakness is part of a broader problem. Financial ads comprise about 12% of overall Internet ad spending while online auto ads account for 10%. Worried investors say that these two sectors provide up to 20% of Yahoo's sales in the United States. Another cause for concern is the launch of Google Finance back in March, which threatens to take away Yahoo customers.
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