Yahoo Considers For-Fee Content Amid Ad Slowdown

Yahoo Inc., whose Web sites draw more than 56 million users a month with a variety of free features, said it will develop more content for which it can charge a fee.

Currently, the Internet’s most-used search portal sells advertising to generate about 90% of revenue. As ad sales have slowed this year, Yahoo shares have fallen 84%, wiping out $96 billion in stock market value.

Founder Jerry Yang acknowledged Thursday the company was considering more subscription services, such as an online music service.

“Clearly, there will be certain kinds of content that won’t be free,” he said in a presentation to investors at the Credit Suisse First Boston media conference in New York.

None of the content that Yahoo now offers for free will be for a charge, Yang said.

Yahoo already charges for services such as Bill Pay, personalized e-mail addresses and extra e-mail storage.

With Yahoo still dependent almost entirely on advertising, sales are projected to rise about 31% next year, according to the average estimate of analysts polled by First Call/Thomson Financial. That would be Yahoo’s slowest growth since the company first sold shares to the public in 1996.

Yahoo shares were unchanged Friday at $34.94 on Nasdaq. The Santa Clara, Calif.-based company has about a 30% chance to report a profit that misses analyst estimates for the fourth, first or second quarters, Morgan Stanley Dean Witter analyst Mary Meeker has estimated.