Tuesday, 15 May 2007

Yahoo! Investors Sue Company Over Ad Technology

Yahoo has been facing severe competition from Google which possesses superior search techniques as opposed to Yahoo and hence has better advertising systems in place.

A clutch of Yahoo investors have sued the Internet giant over claims that the company hid falling user numbers due to poor advertising systems.

Yahoo has been facing severe competition from Google which possesses superior search techniques as opposed to Yahoo and hence has better advertising systems in place.

Yahoo’s stock market price dipped badly late last year after concern about the effectiveness of its search marketing platform and CEO Terry Semel's leadership of the darling of web 1.0.
A San Diego, California based lawyer firm said in its statement, “The complaint alleges that Yahoo’s stock rose precipitously on defendants’ positive statements concerning Yahoo’s sales growth, record reported revenues and earnings and strong business fundamentals, which defendants stated would provide further stability and growth, reaching a Class Period high of over USD 43 per share on January 6, 2006. However, concealed from investors was the fact that due to operational deficiencies in its ad technology, Yahoo was rapidly losing market share to Google and other search engines and Web destinations that would significantly undermine its revenues, earnings and value."

According to analysts, Google makes about 5 cents for every search while it just half for Yahoo. To fend off competition from Google, earlier this year, Yahoo launched a new search technology and ad platform called Panama that to some extent has helped Yahoo.