Display ad revenue excluding commissions to other websites in Q4 fell 5%, even though the amount advertisers were willing to pay for ads rose 7%, the company said in an earnings statement.Yahoo's business model is bound by the Revenue vs Quality trade-off. In contrast, Google provides relevant text ads that improve user experience AND generate more revenue. The difference in business models creates a huge performance gap.
...the fall in Q4 was also at least partly an effect of Mayer's mission to improve the user experience on some Yahoo properties, including its home page, wrote Cowen and Co. analyst John Blackledge, who rates Yahoo as neutral. Fewer ad impressions in Q4 were "partially a result of an attempt to rein in site clutter and improve user experience," he said.
Tuesday, January 29, 2013
Trade-off of the Day: Revenue vs User Experience
Yahoo reported 2012 Q4 results that show a company stuck in a 15-year old trade-off between selling more annoying banner ads and improving user experience:
tags: tradeoff, business, internet, model, constraint,