Dive Brief:
- According to eMarketer research, Yahoo is on pace to grab 1.5% of all digital ad dollars worldwide this year, down from 2.1% in 2015.
- The company is simplifying its business model with a focus on mobile, video, native and social, but is still losing market share.
- Yahoo's ad revenue expected to drop 13.9% percent this year, a greater fall than last year’s drop of 4.7%.
Dive Insight:
Yahoo has been rapidly losing market share as it attracts bidders to sell off the different pieces of its business. Still, the fact that the company will receive 1.5% of all digital ad dollars spent globally this year is a testament to the strength of the business that Yahoo built in the early years of the internet.
“With Yahoo aggressively working to simplify its business, we expect to see continued growth in [mobile, video, native and social]," eMarketer senior forecasting analyst Martín Utreras said. "However, we don’t expect much improvement in the company’s legacy business and cost structure—consumers continue migrating to mobile search, investment in traditional banner advertising continues to shrink, and Yahoo’s distribution partnerships continue adding more to traffic acquisition costs.”
Despite Yahoo's dwindling market share, suitors are lining up to take the company's internet business off its hands. Verizon, AT&T and a consortium led by Quicken Loans Founder Dan Gilbert and backed by Berkshire Hathaway Chairman Warren Buffett are among the groups heading into the third and final round of bidding for Yahoo’s internet assets. Verizon is viewed by many interested parties as the strongest contender for Yahoo's online assets, according to the Wall Street Journal. AT&T's move for Yahoo's internet business is fueled by its interest in catching up to Verizon in the online ads business.