This Chart Is A Complete Nightmare For Marissa Mayer And Yahoo

Stifel analyst Jordan Rohan put out a note this morning reducing estimates for Yahoo’s financials in the third quarter “and beyond.”

The main reason?

Yahoo’s search share is tanking at an alarming rate. 

That’s a problem because search is a pure profit centre for Yahoo. Rohan decreased his Q3 revenue projection for Yahoo $80 million and his EBITDA projection $70  million.

Here’s a chart based on ComScore data of Yahoo’s core search “growth”:

Yahoo Search Growth

Photo: Comscore

Yahoo outsources search tech and search monetization, and Yahoo.com isn’t growing much at all.

You might think that this kind of atrophy is normal for a company in that position.  You’d be wrong.

Look at AOL, which outsources search to Google:

AOL Search Growth

And look at Ask, which also uses Google:

Ask Search Growth

The silver lining for Yahoo, YHOO owners, and Mayer is this: Looking at AOL and Ask reveals search growth can turn around.

That’s why Mayer’s new search-friendly redesign of Yahoo.com makes sense. (The search bar floats around the page with you as you scroll.)

It might help for Yahoo to switch to Google. The DoJ barred Yahoo from doing that back in 2009, but it’s obviously a different era now.

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