Yahoo!

Yahoo! is getting closer to picking a new chief executive to replace Jerry Yang and investors are abuzz about who might be on top. While two names are riding the rumor circuit, Yahoo! might need something that neither of the named candidates has: youth.

On Friday speculation began circulating about possible CEO picks after a report said the Internet company narrowed its search to Carol Bartz, the current chairwoman of Autodesk (nasdaq: ADSK ), Susan Decker, Yahoo! (nasdaq: YHOO )’s president, and one other candidate.

Yahoo! is expected to make a decision before its earnings report on Jan. 27.
Yahoo’s shares rose 0.5% to $13.13, at the close on Friday.

Global Equities Research analyst Trip Chowdhry said that the ideal candidate is neither Bratz nor Decker, but a 25 to 30 year-old Steve-Jobs-like-wunderkind who is brash and product savvy. The problem with Yahoo! he said is products, technology, and motivation, and the new leader will have to be able to deal with all three. “If Bartz becomes CEO, investors should run the other way,” said Chowdhry. “Autodesk is a prehistoric company when it comes to technology. We want someone who can cut through the generation gap and who can take the company to the next level.”

Chowdhry doesn’t see an outside candidate taking the reins of Yahoo! and said that any internal promotion would probably come from the engineering ranks. “If someone is super bright Yahoo! is not going to be their first choice, it’s not going to be their second choice and it’s not going to be their third choice,” said Chowdhry. “I haven’t seen any person externally who can change the fortunes of Yahoo!”

Chowdhry isn’t happy with Decker as a pick either. “She oversaw three failed CEO’s and under her leadership the stock has gone down more than 80.0%,” he said.

Google Paid Clicks

New data confirming slowing growth in Google Inc.'s paid clicks renewed debate Thursday on Wall Street over whether the Internet search company's revenue can quickly adjust to changes it made in how it generates clicks.

Citing data that comScore Inc. released after the market closed on Wednesday, analysts said growth in Google's click-through rate has nearly ground to a halt.

Google's stock closed down $14.11, or 3.1 percent, to $444.08 in afternoon trading.

The click-through rate grew 3 percent in February compared to a year earlier, and January saw no increase compared to January 2007. Several months earlier, the rate was growing 25 percent to 40 percent compared to a year earlier. The new data is in line with click-through declines Google reported last quarter.

Google, which gets paid when users click on a sponsored ad that comes up as the result of a Google search, has reported steadily rising per-click revenue.

The Mountain View-based company said in January that the drop in click-through rates is a result of its efforts to boost the usefulness of each click to its advertisers' sales performance. For instance, the company decreased the space around a word that would result in a click, so more clicks would be intentional.

Analysts disagree on how long it will take Google's per-click revenue to adjust to any increased value per click it has created.

Rob Sanderson, an analyst with American Technology Research, said per-click revenue will rise immediately if advertisers see more value in each click, because they'll pay more for them at auction.

"It's not clicks that advertisers are really buying, it's what those clicks get them, which is sales conversions," said Sanderson.

Colin Gillis, an Internet analyst at Canaccord Adams, also was optimistic.

"It's very difficult to spin this as positive data point, but it also doesn't mean the world is ending," Gillis said.

The click-through rate is only one piece of the equation for Google, he said.

"The counter point is that Google is out there saying, 'We are trying to make our clicks more worthwhile.' They want to actually deliver relevant hot leads to their customers because that's what their customers want," Gillis said.

Other analysts disagreed.

Piper Jaffray analyst Gene Munster predicted Google will fall short of Wall Street expectations in the current quarter because of the click-through rate.

Lehman Brothers analyst Doug Anmuth cut his 2008 profit estimate for Google and reduced his price target to $580 per share from $644, citing the click-through rates.

He also said advertisers may be trimming their budgets -- and not responding to the changes Google has made.

Google, which reports first quarter earnings April 17, declined to comment on the comScore data.

Numbers from comScore are closely watched by some industry analysts, even though the firm uses online recruitment techniques dismissed by many traditional pollsters.

Sanderson said comScore's numbers have a wide margin of error and can't be used to predict quarterly results.

"ComScore data has a really wide range of plus or minus in terms of being accurate. They don't know what the real number is, it's just a sample," he said.