August 19, 2006

Yahoo uses humor to sell online advertisingĀ­no fooling

Yahoo Inc. may be growing up, but it's keeping its sense of humor.

When the time came to add some high-profile financial material to its On The Money site on the World Wide Web, it teamed with a pair of fools.

The Santa Clara company last week introduced Motley Fool, an often humorous look at the financial world written by brothers Tom and David Gardner from their offices in Alexandria, Va.

But while the Fool site contains features ranging from football trivia to "Dogs of the Dow," its humor conceals a deeper purpose: battling for advertising dollars in an exploding Internet market.

Rather than exchanging money for services rendered, Yahoo and the Motley Fool Inc., whose sites are now linked, are cooperating to market themselves to consumers and advertisers.

Both make revenues primarily by selling online advertising.

Motley Fool debuted on America Online in August 1994. It quickly became one of the service's most popular features, registering 300,000 visitors a month. It also appears in USA Today's Money section.

The company has a list of stock portfolio tips that has performed almost four times better than Nasdaq.

Motley Fool employs 130 people across the country.

Yahoo has enjoyed a hip image during its short life. It started by providing one of the highest-volume search engines--software for finding Web sites.

But in recent months, it has added an MTV site and other popular venues aimed at a younger audience.

Motley Fool represents Yahoo's effort to appeal to high-income consumers.

"One thing that we were missing was some really good financial editorial," said Yahoo senior producer John Briggs.

On The Money has had double-digit growth over the past several months.

However, competition has remained stiff. Dow Jones has extensive offerings on the Web, as do investment houses such as Merrill Lynch. Also, many other publications (and even Internet service providers) offer their own financial sites and links.

It is especially important to keep traffic to On The Money growing because advertisers pay on a "per-impression" basis: All ads on the site link visitors to the advertiser's home page, and Yahoo is paid a small fee when someone follows one of those links.

The process is typical of commercial Web sites.

Financial information and services is one of the fastest-growing Internet markets, said Laird Foshay, president of Tabula Interactive Inc., the Menlo Park-based company that runs the InvesTools Web site.

That site contains 25 high-profile financial newsletters and sells financial reports for $2 to $10.

InvesTools' ad revenues are growing 20 percent per month, Mr. Foshay said.

Advertisers include the Charles Schwab Corp. and Scudder Mutual Funds.

Mr. Foshay credits E-Trade Securities Inc. with helping popularize the Net as a financial medium.

E-Trade is a Palo Alto company that allows registered users to trade stock on the Internet. It is adding 10,000 accounts a month, Mr. Foshay said.

The growing interest in getting financial information on the Net is the product of several converging trends.

More people are handling their own investments than ever before, Mr. Foshay said. And because such people generally are educated and fairly young, it is only natural that they turn to the Internet.

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