• Advertising Age, Monday, February 2, 2009 11:45 AM

Yahoo's business didn't collapse in the fourth quarter of 2008, but guidance for the first quarter of '09 was pretty awful: Revenues are expected to fall 10% as the market for display ads softens further. Meanwhile, the vast lead in display that Yahoo holds over bitter rival Google is turning out to be "less formidable than it used to be," writes Advertising Age Michael Learmonth.

According to researcher Advertising Perceptions, Google is now perceived to be Yahoo's equal in many key areas of display. The research firm's Advertiser Intelligence poll of 1,212 ad agency and marketing execs found that in November of last year, Google provided advertisers with better quality results. Advertisers rated Yahoo 29% better than the average of the 150 online media companies in the survey, but Google rated 43% better. Even so, Google is still a nonplayer in display compared to Yahoo, as it still earns 99% of its revenue from search, while Yahoo dominates 33% of the $7.1 billion display market, according to eMarketer.

"Perceptions of Yahoo are strong and are improving, but what's surprising is how well Google's display efforts have succeeded in creating equally strong perceptions on Yahoo's turf," said Advertising Perceptions CEO Ken Pearl. "Since positive perceptions lead to increasing ad revenue, it will be interesting to see how the online-display market plays out over the next several months."

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