The numbers behind "Do You Yahoo?"

In this article, "Do You Yahoo?", CNNMoney.com states that Yahoo and Google have roughly the same number of visitors, but Google makes 11 times as much money as Yahoo does. Since the early days of advertising I've known that advertising on search results pages pays a lot more than advertising on content-display pages, but I've never seen it compared at 11 times higher. Here's a deeper look at the numbers.

Revenue: I just looked up the numbers (I prefer finance.yahoo.com), and Yahoo's yearly revenue was $6.75B, while Google's was $22.27B, so that's a difference in revenue of less than 4X.

Net Income: But the difference is much more dramatic when you get down to the Net Income line. Here, Google is at $4.58B, while Yahoo is at $16.59M, a whopping difference of 276 to 1.

Employees: Dig a little farther, and you'll see that Google has 19,786 employees, while Yahoo has 13,600. That's not a huge difference, but for Google that's revenue of $1,125,543 per employee, and for Yahoo is $496,323 per employee. Both of those numbers are huge compared to the consulting business, where we made $100K to $150K per employee, per year.

Growth: Yahoo's biggest financial problem is that their revenue numbers have been going in the wrong direction, with quarterly revenue growth of -12.50%. Times are hard for everyone these days, but Google's quarterly revenue growth is at least increasing, at 2.90%. (As a quick point of comparison, Oracle is at -5.20%, Microsoft is at -17.30%, Sun is at -20.00%.)

 

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