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Net advertising firm DoubleClick, Inc. (Nasdaq: DCLK) fell 1 7/8 to 13 1/16 Friday, and Web content and portal giant Yahoo! dropped 11/16 to 38 15/16, following reports of analyst concerns about the online advertising market.
S.G. Cowen reportedly lowered revenue estimates for the companies to reflect a decline in Internet ad spending. Prudential Securities was said to have lowered its price target for Yahoo! for the same reason, while at the same time repeating a strong buy recommendation.
Shares of online advertisers like DoubleClick, as well as other Internet businesses like Yahoo! that depend on online ads for revenue, have fallen on hard times. Last January, DoubleClick was trading as high as 135 1/4.
For its part, Yahoo! recently hit an all-time low, after trading above 200 earlier this year.
In October, when DoubleClick reported its first pro forma profit, company shares nevertheless fell to a 52-week low because of nervousness about the fourth quarter.
Revenue at DoubleClick rose 79 percent from a year earlier to US$135.2 million, while income before items totaled $3.7 million, or 3 cents per fully diluted share, compared with a loss of $3.8 million, or 3 cents, in last year's third quarter.
Yahoo! also fell on the day its third-quarter results were announced. The report showed the number of customers fell from the second quarter, at a time when cash-strapped dot-coms were closing up shop or cutting back on advertising spending.
Yet some industry observers are optimistic. A recent study from the Internet Advertising
Bureau and PricewaterhouseCoopers found that the Internet advertising
industry saw $2.1 billion in revenue in the second quarter, with first-half
sales approaching the total for all of last year.
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