Yahoo backs off on porn sales
Over the next few weeks, Yahoo will pull all pornography-related products from the shopping, auction and classified areas of its site. In addition, the company will stop selling ad banner space to sellers of pornography.
The moves comes just two days after the company confirmed that it was selling adult entertainment products, such as movies on DVD and video.
"While Yahoo has offered controlled access to adult products available via the Internet since launching our commerce services more than two years ago, many of our users voiced concerns this week about some of the products sold by merchants on Yahoo Shopping. We heard them and swiftly responded," Yahoo President Jeff Mallett said in a statement.
Yahoo has come under considerable scrutiny over the past few days after the Los Angeles Times reported that the company was expanding its online sales into sex-related videos and DVDs.
The question now is whether the decision to not accept adult advertising and merchandise sales will affect Yahoo's financial performance. The impact is still unclear, but it its likely negligible.
"I'm not going to change my estimates because of it," said Jeffrey Fieler, an equity analyst at Bear Stearns. "Certainly pornographic material on the Net overall is a money generating business, but there really has been no way to estimate what Yahoo gets out of it. I would say the numbers are small enough not to have a material impact on an overall basis."
Yahoo's financial performance has been kept under close watch since the company slashed its revenue expectations for the year. The souring market has caused a recession in the flow of advertising dollars to the company. The Web giant has since begun scrambling to change course by developing its non-advertising revenue, such as introducing paid "premium services" and pushing its corporate products.
On Wednesday, Yahoo announced it would layoff 12 percent of its workforce when it reported earnings. The company generated net income of $7.6 million on sales of $180 million for the first quarter 2001. That's much less than $230 million in sales for the same period last year.
The company expects to generate between $700 million and $775 million in revenue for 2001.
Currently, Yahoo still has ad banners for sex-related Web sites. Entering the word "sex" into Yahoo's search directory results in a list of links for sex-related content on the site and advertisements for other sex sites.
Despite the outcry, Yahoo's support of pornography on its services is not new. The company said is has sold sex-related products on Yahoo Shopping for more than two years. The products have been guarded against underage access through a credit card screening process for age verification.
A Yahoo statement issued on Wednesday said the company has received "little negative user feedback regarding adult products" to date.