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Bill Rice is the CEO of Kaleidico, a leader in lead management systems. Prior to founding Kaleidico he was the VP of National Home Equity and the Home Loan Benefit program at Quicken Loans and one of the founding executives of DeepGreen Bank, an Internet-only bank that was one of the first and (at that time) largest buyers of LendingTree leads in early 2000.

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Yahoo to Cut 10%, Watch Bankrate.com

October 22nd, 2008 • Related • Filed Under

Yahoo has announced a pending 10 percent reduction in workforce to counter a 64 percent drop in revenue, $54.3 million compared to $151.3 million a year ago. Analyst highlight a rapid detriorating display revenue growth in the weakness.

Yahoo, Bellwether for Bankrate.com?

This made me think Bankrate.com, a notably strong performer in a struggling mortgage lead generation market, because there quarterly reports continue to cite challenges in the display component of their business. Could we hear an echo in Bankrate.com’s upcoming quarterly report, October 30th?

Here are some reasons I think we might:

(Source: Google Finance)

There is a notable historical correlation between Yahoo and Bankrate.com market movements. And, Investors seem to already be pricing in some weakness.

(Source: Briefing.com)

This precipitous fall in mortgage applications is going to take out the typical advantage of mortgage market volatility to publishers like Bankrate.com.

A Few Caveats

Here is where I expect strengths:

  • Tom Evans is masterful at managing investor expectations, he is rarely one to surprise
  • Have cash on their balance sheet to fuel opportunistic/strategic acquisitions (bankaholic.com)
  • Expect rate table hyperlink traffic to remain solid
  • Expect deposit coverage to increase for funding starved lenders
  • Expect mortgage coverage to hold or drop only slightly
  • Traffic is holding steady

What do you think? Who is strong and who is weak in this market?

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If you have news or tips on the lead generation market email me or follow me on Twitter.

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