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Ad Revenue still a Struggle for Yahoo

 (Image source: mashable.com)

Yahoo! Inc.’s (NASDAQ:YHOO) shares are underwater this morning after fourth quarter earnings revealed a decline of 6 percent in display-ad revenue and lower earnings guidance for the first quarter of 2014. However, the company did beat earnings estimate by 8 cents. Traffic on the site has increased, but Yahoo has been unable to capitalize on it in terms of generating more ad revenue. It feels like Yahoo rides on the coattails of Alibaba too much. Tumblr is a huge traffic generator for Yahoo, but the full ad revenue potential is not being fully realized by Yahoo. At some point, Yahoo needs to decrease its reliance on Alibaba and start finding more ways to compete with Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB) on ad revenue.