Doug McIntyre at 24/7 Wall St points out that the stocks of Yahoo, TheStreet.com, and CNET are down big following comments by Time Warner management that AOL’s display advertising would continue to decelerate in Q4. Time Warner attributed this deceleration to two factors, both of which affect YHOO, TSCM, CNET, MSFT, and other premium online properties:
- Shift of ad spend to “performance” rather than “premium” inventory, often using third-party networks (this is not news)
- Weak demand for display ads (semi-news, possibly attributable in part to economic weakness and in part to price pressure).
Yahoo’s display performance was OK in Q3, so the conclusion here seems to be that AOL is seeing incremental market weakness in Q4. We thought Time Warner management danced around this issue on the call, but it’s certainly possible that we are starting to see broad-based market weakness.