Yahoo is farming out its search business to Microsoft to focus on display advertising. That’s probably the right idea, as Yahoo is still the largest display-ad publisher in the industry, by a considerable margin.
Yahoo delivered 521 billion ad impressions in the 12-month period ending last November, according to comScore, beating out Fox Interactive (including MySpace) at 368 billion and Facebook at 330 billion.
And things finally seem to be picking up: During Yahoo’s Q4 earnings call, CEO Carol Bartz said display ad revenue grew 26% from Q3. That was the strongest sequential growth the company had seen since 2006.
To stay on top, Yahoo will have to keep traffic to its homepage portal strong — which could mean a major upgrade to its Mail service — and fend off rising players like Facebook and AOL.
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