> |
Enhanced & Diversified Marketing Solutions. We diversified our marketing services line, which continues to comprise a majority of our revenue, by offering a broader range of solutions and effectively tapping new markets, such as small- and medium-sized businesses. This approach has served us well in the current environment, by enabling us to accelerate growth in our marketing services line every quarter during 2002.
Yahoo!'s sponsored search outperformed one of the most dynamic segments of the Internet, with higher click-throughs than the industry average, due to the quality of our search results. Sponsored search has enabled Yahoo! to tap a largely underdeveloped opportunity for the Internet: small- and medium-sized businesses. In the aggregate, small- and medium-sized businesses make up almost twice as much of GDP compared to the largest 200 advertisers in the U.S. However, their marketing and advertising channels have been historically limited, with the exception of a few print alternatives, like yellow pages and local newspaper listings. The Internet offers a truly unique opportunity for these companies to market to their customers in an economical way and we are aggressively pursuing this opportunity on a global basis. While sponsored search was an important contributor to incremental growth in 2002, we expect to continue seeing solid organic growth in 2003. As we continue to improve our search product and integrate sponsored search within several vertical areas of our network, we expect to see a higher volume of click-throughs. In addition, as more businesses recognize and take advantage of the valuable marketing and commercial opportunities not available to them through traditional media outlets, we believe that the growing demand for lead generation queries such as sponsored search should result in an increase in prices paid per click.
Though it was not a banner year for traditional advertising in all forms of media, Yahoo! achieved modest year-over-year growth in the fourth quarter for the first time in eight quarters. Our revenue performance during a down market clearly demonstrates that we gained share in traditional advertising. Throughout the year we focused on our priorities to build strong relationships in the industry, take the lead on important issues like creativity, develop strong industry knowledge within key verticals and create the highest quality offerings. Some traditional advertisers, such as The Gap Inc. and General Motors, to name a couple, which previously engaged Yahoo! for transactions or lead generation, are now beginning to work with Yahoo! on brand campaigns and initiatives. Highly trafficked areas within the Yahoo! network, such as our front page, have become an important showcase for promotions and product launches. We expect steady growth in our traditional advertising business in 2003.
|
 |
