INTERNET PORTALS

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INTERNET PORTALS
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YAHOO 2002 REVENUES

• Power
• 232 million monthly visitors makes Yahoo the most
  popular site on the Web
• Revenues
• 953 million (2003 est 1.3 billion)
• Profit
• 43 million (2003 est 200 million)

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REVENUE STREAMS 2003 (est)

• INTERNET ADVERTISING 615 mn (once accounted for
  95 of revenue, now only 49)
• PAID SEARCH (revenues for selling links on
  search-results pages) 230 mn
• PAID SUBSCRIPTIONS (paid-for services to clients,
  incl. online personals and super-size email
  accounts) 251 mn
• ONLINE CAREERS (job search) 80 mn
• BROADBAND ACCESS (in partnership with SBC
  Communications Yahoo takes 5 of the 40-60 that
  users pay each month to SBC) 70 mn

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CHALLENGES (1)

• 1. To build Yahoo into a digital Disneyland, a
  souped-up theme park for the Internet age just
  as many experienced web users go straight to
  search-engines like Google rather than through
  general interest sites. This trend, if
  continued, could reduce advertising revenues to
  Yahoo. Further, the internet theme park idea is
  also the pursuit of rivals AOL Time Warner and
  Microsofts MSN.
• 2. Dependence on license with Google to provide
  Internet search. This boosts a Yahoo rival.
  Yahoo may replace Google with newly-acquired
  Inktomi. But will clients like Inktomi?

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CHALLENGES (2)

• 3. Broadband is recognized as the future, but its
  partnership with SBC gives it access to only 59
  mn homes, in comparison with MSNs access to 75
  mn homes (via Verizon and Quest Communications
  International)

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AOL Time Warner

• In January 2000 media company Time Warner agreed
  to be acquired by Internet company AOL in a stock
  swap priced at 284 billion
• By May, 2003, the stock market valued AOL Time
  Warner at 61 billion, a lost of 223 billion in
  shareholder wealth
• The company carried a debt of 27 billion

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Signs of Recovery?

• Operating cash flow for (AOL TW components)
  Warner Bros, Time and Turner Broadcasting System
  rose to 7 billion in 20002 from 1.9 billion in
  2000
• AOL Time Warner as a whole achieved a first
  quarter operating income in 2003 of 1.2
  billion, on a 6 increase in revenue to 10
  billion.

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Futures?

• America Online
• Problems
• Continued loss of dial-up customers to broadband
  fast-speed services
• Federal investigations into accounting practices
  related to ad deals
• Pricey on-line services

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Futures? (2)

• Warner Music Group
• Problems
• Digital piracy and file-sharing helped cut album
  sales by 23 over two years

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Futures? (3)

• Time Warner Cable
• Comcast has 21 million subscribers, so Time
• Warner is a distant second with 11 million
• Turner Broadcasting
• CNN is losing to rival Fox News in ratings war
• Fears of impact of personal video recorders.
• Warner Bros/New Line
• Have to maintain pace of recent box office
  successes such as Harry Potter and Lord of the
  Rings
• Worries of digital piracy
• HBO
• Finding new hits when Sex and the City, Six Feet
  Under and The Sopranos bow out.
• Time Inc
• Convering magazine readers to digital formats