Shares of Yahoo plunged to a 52-week low on Thursday as an analyst downgraded the company and said the current weakness in the online advertising market could last longer and be more severe than
originally thought. Yahoo receives roughly 80% of its revenue from advertising. Cutbacks at the Web consulting firms hurt Yahoo since most of Yahoo's clients were companies seeking to build a web
presence -- the same companies that earlier this year were pouring money into web advertising. With the availability of venture capital dwindling, many just have no money to spend on advertising.
According to management, the company is working to diversify its revenue base by adding more fee-based services so it would be less dependent on advertising. Yahoo has stated that it is also reducing
its dependence on shaky dot-com advertisers and reaching out to bigger, more established businesses.
-Chris Griffin