Uh-Oh Time: Q2 Looking Weak For Yahoo (YHOO). What About Everyone Else?

Kara Swisher looks ahead to Yahoo’s Q2 report, due July 22nd, and sees omnious signs: Yahoo has been dropping ad rates and jamming search result pages with sponsored links in order to make the quarter.

Thus, sources said, such efforts will mean Yahoo is likely to meet the mid to lower range of Wall Street expectations for the second quarter in a few weeks.

But investors would be smarter to focus more on guidance for the rest of the year, which could spell a rougher road for the company and also the entire online advertising sector.

Along with its own internal turmoil, including many too many departures from its ad sales force–with more significant changes in that organisation to come very soon, I am told–Yahoo is also facing a growing economic headwind, as the economy sours further and eventually eats into Web sector.

So much so that many inside the company said that internal revenue forecasts for the rest of the year are likely as not to be adjusted downward.

This sounds right to us: The company has instituted a not-complete-but-pretty-close hiring freeze through the middle of this month, which doesn’t bode well for Q2. And we’ve already heard from at least one large Web publisher who said that the ad slowdown had finally hit all of the big players in the last month or so. Which is why we’re less interested in what this quarter looks like for Jerry and co — hard to see the top Yahoos surviving the year, no matter what their earnings look like — and what we’ll see around the Web as earnings season kicks off this month.

See Also: Online Slowdown: It’s Here
Yahoo Cost Freeze Means Business Likely Weak
Yahoo’s Hiring Freeze: Confirmed And Explained
Yahoo: We’re Not Shutting Down Yet!

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