Yahoo faces a further difficulty in fencing off for-pay areas of its site since it has leaned away from creating its own content in favor of aggregation. If subscription fees are ever to become a significant portion of its overall revenues, Yahoo may be forced to invest in content creation, something it has said it does not want to do. But in 2000, more voices on Wall Street are questioning whether Yahoo can maintain its stellar growth by depending so heavily on advertising revenues. It is crucial for Yahoo to prove that it can weather the Internet maelstrom by stretching its tentacles elsewhere. The company added that more mainstream advertisers are turning to Yahoo as an important place to present their messages to Web users.
Concerns stem from the overall health of the Internet sector.
Since April, publicly traded Internet companies have taken significant hits on Wall Street. Scores of privately held Internet companies have been forced to shut down after failing to attract more funding from scared investors and venture capitalists. As a result, many start-ups previously flush with venture capital have slashed their heavy advertising spending. That slowdown has taken its toll on Yahoo. Like other Internet highfliers, the company's stock has plummeted since the summer, when analysts began raising concerns about its growth.