SUNNYVALE, CALIF. (AP) - Yahoo Inc.'s second quarter was humming along until the second half of June when management said several major advertisers reined in their spending.
That left analysts wondering about the catalyst for the sudden slowdown and whether it would carry over into the current quarter ending in September.
Although she isn't certain, Yahoo CEO Carol Bartz said she suspects some advertisers with large international operations clamped down on their spending toward the end of the April-June period to insulate their earnings as the U.S. dollar strengthened against the euro and the British pound.
The flip-flopping currency rates meant U.S. companies were bringing in fewer dollars from Europe in the second quarter, squeezing their second-quarter results.
Those pressures may have had a ripple effect on Yahoo as Bartz explained Tuesday in Yahoo's second-quarter earnings conference call.
QUESTION: You talked about the weakness you saw in the back half of June. Do you have any clarity as to what happened?
RESPONSE: "We really believe our customers are doing very wise expense management.
"Most of our big display advertisers are multinational companies. They have (currency) issues like everybody else does and marketing is one of those areas that is easy to dial on and off. Of course, so we've been watching very carefully in the first weeks in July, (and) it's like it never happened. It's back to the same run rate we've had. Which really has us believing that's what it was."