Yahoo sees rapid emerging market ad growth
SINGAPORE (Reuters) - Internet media firm Yahoo Inc expects to increase its online advertising revenues in emerging markets above the industry's 30 percent growth rate over the next three years, an executive told Reuters on Tuesday.
Online advertising revenues in emerging markets are expected to grow at 30 percent annually over the next few years as more people go online and access the Internet through mobile phones.
"For Yahoo's emerging markets, we're going to grow faster than that," Prashant Mehta, Yahoo's vice president of emerging markets, said in an interview.
Yahoo, which rejected a $47.5 billion takeover bid by software giant Microsoft Corp, has an estimated 130 million users in the emerging markets of Southeast Asia, India and Latin America. This compares with over 500 million users worldwide every month.
Mehta said mobile subscriber penetration in these markets is expected to grow two to five times faster than that of Web users.
"For many users in the emerging markets, the only way to get online is through a mobile device. For us, the key is delivering a locally relevant product on a mobile platform," he added.
Yahoo, the world's No.2 web search service after Google Inc, plans to "aggressively" hire new sales, marketing and engineering staff in these emerging markets, and boost investments in infrastructure such as data centers.
"We doubled our headcount in the emerging markets between 2006 and 2007. We're not going to slow down our investments in these markets," Mehta added, but declined to provide detailed forecasts.
POPULAR IN ASIA
The web pioneer's top three priorities are Southeast Asia, India and Latin America, including Brazil.
"These are the top three markets in terms of the potential revenue opportunity, these are the markets in which Yahoo can win," Mehta said.
According to a May 2007 study by market research firm comScore, Yahoo sites are the most popular in the Asia Pacific region, followed by Microsoft and Google sites. Yahoo sites ranked in the top position for six of the 10 countries surveyed.
The survey covered people aged 15 years or older and excluded traffic from public computers such as Internet cafes or web access from mobile devices.
Vietnam, the Philippines, Malaysia, Turkey and Romania, where the proportion of Internet users is above 20 percent, look particularly promising for online advertisers, Mehta said.
Only about 2 percent of total advertising dollars are spent online in emerging markets, compared with over 15 percent in the UK and 10 percent in the United States.
"These markets are hitting the tipping point. As Internet user penetration grows, we see a significantly greater percentage of advertisers willing to participate with us in this medium."
Last month, Microsoft walked away from a sweetened proposal to buy Yahoo for $47.5 billion, or $33 a share, as talks broke down after the latter rebuffed the offer, saying it would only settle for $37 a share.
Mehta declined to comment on the proposal, but said Yahoo was always looking at opportunities to collaborate with others, including Microsoft and Google.
"We continue to seek partnerships with other players in the market," he said, adding Yahoo has a revenue-sharing agreement with Microsoft's MSN in India, where the latter uses Yahoo's search marketing platform to generate sponsored links from advertisers.
(Editing by Neil Chatterjee and Lincoln Feast)
