Branded advertising revenue growth for Yahoo! US is likely to be down 40% on last year at 20% this quarter, according to predictions from Merrill Lynch.
Despite the projected slowdown in growth, the report was positive overall, with Merrill Lynch reiterating its buy recommendation. “Our industry contacts indicate that Yahoo!’s premium inventory remains a differentiated market for quality conscious advertisers, which we think should provide a competitive buffer that will enable Yahoo! to continue to increase CPMs,” wrote research analyst Justin Post.
For next year, Merrill Lynch forecast 21% branded revenue growth – including 4% growth from the recent acquisition of a 20% stake in automated ad online exchange Right Media.
That estimate assumes 6% growth in page views and 8% growth in monetisation for premium inventory, and 32% page view growth and a 31% increase in monetisation for non-premium pages.
The new paid search platform, Panama, will also boost revenue in the second half of next year, predicted Merrill Lynch. The brokerage house anticipates that Panama alone will account for a 14% increase in revenue per search in next year’s third and fourth quarter.
Yahoo! announced its Q3 results in October, with chairman Terry Semel calling them unsatisfactory. However, Yahoo! saw its revenues increase 19% for Q3, compared to the same period in 2005, reaching $1,580 million (see Yahoo! Announces Q3 Results).
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