Switching from Pay-Per-Click to Pay-Per-Lead On Certain Sites

I've been switching from Yahoo Publisher network (YPN) pay-per-click ads to pay-per-lead ads provided by Commission Junction (CJ.com) on some of my high traffic sites. I've been earning a lot less per click with YPN this year, so it's time to mix things up a bit.

I'm not liking the way things are going at Yahoo! News that Y! is cutting 10% of its workforce didn't scare me too much. But $37 million in advisory fees in one quarter scares the hell out of me. That's a serious waste of money considering the company only made $70 million during Q3 2008 -- a decline of 53% from Q2. Here's a clip from a Wall Street Journal article:

"...Now that Jerry Yang is planning to cut 10% of Yahoo's work force, he might want to contemplate saving a bit more money by firing some of his advisers.

Not only did the Yahoo CEO end up turning down Microsoft's $33-a-share offer for his company, a price that now feels like a distant memory, but he paid through the nose for advice on doing so.

Yahoo disclosed late Tuesday in its third-quarter earnings release that it spent $37 million on advisory fees in the third quarter -- a million dollars more than it had spent on advice over the previous two quarters combined.

The amount was big enough to make a significant impact on Yahoo's operating income, which fell 53% to $70 million in the quarter. Without the fees, Yahoo's operating income would have been down only -- yes, only -- 28.6%.

For their money, Yahoo's management got legal and banking advice on everything from Microsoft's offer for all or part of the company to the Google search deal, Carl Icahn's proxy contest and "related litigation defense."

And just how useful was the advice? Well, let's see. After four months of study, the government hasn't yet signed off on the Google deal. As for the decision to turn down Microsoft's $33-a-share offer, Yahoo was trading Tuesday at around $12.

Even that isn't dirt cheap, given consensus earnings estimates of about 52 cents a share next year. That puts the stock on a still-heady multiple of 23 times earnings. The lingering hope for shareholders must be that Microsoft will return, albeit at a lower price.

If and when that happens, Mr. Yang should hardly require expensive advice on what to do."

Y! Shoulda' Done: Accepted Microsoft's $33-per-share offer.

Y! Should Do Now: Push Jerry Yang out the door. He can retire from the firm a very rich man.

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