Yahoo getting health conscious
Yahoo Health, as the site is called, will offer information and resources for a number of ailments such as high cholesterol, breast cancer, diabetes, weight loss and depression. Each topic center will include facts about symptoms, links to prescribed medication, news headlines, and additional content from other areas throughout Yahoo.
The opportunity in this site lies in the surge in marketing dollars spent by drug companies. Yahoo is hoping these companies will turn to it as the destination to reach online audiences.
"If you look at the explosion of direct-to-consumer advertising by pharmaceuticals, that's opened a whole new forum for people to get health information," said Tina Pang Mayer, director of Yahoo Health.
Yahoo, which recently increased its emphasis on paid services, also intends to showcase the potential for advertising on its properties.
"We've lost sight of the fact that lots of areas (on Yahoo) have proven to be a great advertising medium," said David Mandelbrot, vice president of entertainment and media.
The hard part for Yahoo and other Web media companies is to convince mainstream advertisers that the Internet is as effective as television and newspapers.
By all accounts, Yahoo's advertising business remains in a slump. Last quarter, the company reported a 4 percent decline in its marketing services revenue, which largely consists of online advertising, from the previous year. Minus a revenue-sharing deal with Overture Services, which pays Yahoo when people click on its preferred search results, Yahoo's core advertising business declined 19 percent over the same period, according to Justin Baldauf, a Merrill Lynch analyst.
Yahoo will report its third-quarter revenue in October. Although the company is expected to show solid gains in its subscriber base, Wall Street still will be paying close attention to signs of an advertising recovery. Earlier this week, some Wall Street analysts published investor notes expressing confidence that Yahoo would report a solid quarter.