The New Economy and its Winners Message Board

To: Bill Harmond who wrote (3787)	12/7/2000 10:45:11 PM
From: Doug Fowler	Read Replies (2) of 56241

William: The one aspect that NOBODY seems to be talking about is exactly WHAT return on investment Yahoo's customers get for the money they spend on banner advertising. Even using the lower rates commonly charged these days, it is not uncommon to see only 10 cents in sales being generated for a dollar spent on net ads. The fact that dot-coms have less money to spend on net advertising is only a small part of the equation. The fundamental change has been that these dot-coms are no longer rewarded for turning a dollar into a dime. Yahoo (and the whole group) formerly benefited from that crazed mentality. Now that reality has set in, it is going to get far worse before it gets better - because Yahoo and everyone else will have to lower their rates until their customers AT LEAST have a chance of breaking even on their banner investment. Of course, before Yahoo stoops to those levels, it will try to create new ways to monetize those eyeballs - of course, new ways that have no history and for which the new dot-coms will trip over themselves to declare the new holy grail. (Yahoo is getting down there - another 50 percent will be just about right.) --Doug Fowler