uploads/2015/01/Ad-mobile-internet-revenue-share_1.png

Mobile advertising revenue fueled Yahoo’s growth rate

By

Updated

Yahoo’s mobile advertising space

In the last part of the series, we reviewed Yahoo’s performance in 3Q14. We discussed how its core businesses are performing. Yahoo (YHOO) increased the growth rate in its mobile advertising business. It claims that by the end of 2014 it will start getting more traffic from mobile than desktop.

Although Yahoo managed to grow its mobile monthly active users to 550 million, it still lags behind Facebook (FB). Facebook has more than 1 billion mobile monthly active users.

Article continues below advertisement

Yahoo isn’t one of the top six players

Yahoo failed to monetize its mobile advertising business. It isn’t among the top six players in the mobile advertising market. According to a report from eMarketer and as the above chart shows, Google (GOOGL) leads the mobile advertising market in terms of revenue. It has a share of ~50%. To learn more, read Why mobile ads are becoming an important component for Google.

Facebook, Twitter (TWTR), and Pandora (P) are some of the other players in this market. Facebook continues to grow its mobile advertising revenue at a fast rate. Yahoo’s absence in the top six is a worrying sign for the company.

Yahoo’s mobile revenue is material 

In third quarter, Yahoo saw mobile revenue in excess of $200 million on a GAAP (generally accepted accounting principles) basis. Also, the company estimates that the GAAP revenue in mobile will exceed $700 million in 2014. For now, management believes that mobile gives a smaller percentage of traffic.

However, as mobile traffic grows, the revenue associated with it will also rise—given the effectiveness of mobile native ads.

Advertisement

More From Market Realist