Websites Smaller Than Yahoo! Will Be Hit Hard By A Drop In Display Ads


Yahoo! (NASDAQ: YHOO) said its revenue fell last quarter to a large extent because of a drop in its display advertising.

The trend will spread to other websites with smaller audience size than those of Yahoo!, AOL (NYSE: AOL) and MSN. The three portals are among the largest sites in the U.S. by visitors. There are several nearly as large that will suffer the same trouble.

Yahoo! revenue fell 5% in the second quarter compared to the same period last year to $1.1 billion after traffic acquisition costs. The company said sales force changes were partially to blame. Industry data show otherwise. Facebook now has over a quarter of the total display inventory in the U.S. Two years ago, that share was close to nothing.

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