Financial statements over the past week from two of the world’s leading Internet hub companies suggest that, although online revenues are growing, the path ahead for major sites seeking to develop online ad spend and transactional revenues remains blurred.
Last Thursday, leading Web destination Yahoo! unveiled profits of $25m (15.2m) on sales of $86m (52m), which are running at three times the level of the same quarter last year.
Yahoo! reported strong progress in its attempts to develop itself as a prime online shopping destination in the US market – a strategy it expects to develop in the UK and other markets based on its Premier Merchants programme.
But although this scheme – aimed at delivering “eyeballs” and sales leads direct to fee-paying merchants – accounted for 30 per cent of its revenues, the value of the transactions generated for Yahoo! through the initiative are still not enough to break out as a separate revenue stream, according to the results statement.
The volume of page impressions generated by Yahoo! services was up from 167 million in December to 235 million in March.
Meanwhile, rival Net directory and portal Lycos has announced a refocusing of its business by cutting back its commitment to funding paid-for Web directory editors.
It also plans to add more personalised features to its services in an effort to challenge competitors.
Executives as Lycos, which claims it is the second biggest attraction on the Web, insist the international service will receive a major boost in the development of its e-commerce programme following the revamp and completion of the planned takeover by US shopping cable TV company USA Networks.
The company has been criticised for being slow in reacting to the introduction of personalised services by rivals.
Lycos vice-president Ron Sege says the demographic and lifestyle data available from surfers using the company’s revamped personalised services would help to generate well targeted shopping offers for Lycos users.
Lycos insists current quarter revenues are in line with market expectations.