Yahoo Ad Revenue to Drop Nearly 14% This Year - eMarketer

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Yahoo Ad Revenue to Drop Nearly 14% This Year

Share of display and search will drop below 2%

March 23, 2016

While digital ad revenues continue to grow for Facebook and Google, they will fall considerably for Yahoo this year, according to eMarketer’s latest ad spending forecast.

Net Search Ad Revenues Worldwide, by Company, 2014-2016 (billions, % change and % of total)

Yahoo’s worldwide net digital ad revenues will fall 13.9% this year to $2.83 billion, from $3.28 billion in 2015. That means its share of the overall digital ad market will fall to 1.5%, from 2.1% last year.

Meanwhile Google, which dominates the global digital ad market, will grow net ad revenues by 9.0% this year and Facebook will grow net ad revenues by 31.0%.

Both search and display ad revenues for Yahoo will drop by double-digit percentages this year.

Its display business will shrink 15.1% to $1.41 billion, while its search business will shrink 12.7% to $1.41 billion.

Since its Q3 2015 forecast, eMarketer has adjusted Yahoo's share of the worldwide display ad business down to 1.7%, from 2.0%.

Net Display Ad Revenues Worldwide, by Company, 2014-2016 (billions, % change and % of total)

Similarly, eMarketer reduced its projections for Yahoo’s share of the global search market to 1.6%, from 2.1%.

“As Yahoo trims down its legacy business to focus on its so-called MAVENs, we expect the company to shrink in size relative to its competitors,” said eMarketer senior forecasting analyst Martín Utreras. “A leaner Yahoo, more focused on its core growing segments, will still face stiff competition in an ever more crowded and sophisticated market.”

The one area of growth for Yahoo is mobile. Its worldwide mobile ad business will grow 24.5% this year to $1.31 billion. Yet as rivals Google and Facebook grow by larger percentages, Yahoo’s share of the mobile market will continue to shrink to 1.3%, from 1.5% last year.

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