Rumours reach Cheeze HQ that Yahoo! and Google are close to closing a ‘big deal’ which would see integration of Google paid ads onto the Yahoo networks. This rumour comes after positive feedback from Yahoo and Google on the two week limited test which saw Google paid ads appear against a small number of Yahoo! Results. (read more here about the two week trial)
This deal is a very interesting one, not least in the grand scheme of Microsoft’s rebuffed offer to purchase Yahoo! A Yahoo! deal with Google would effectively scupper the Microsoft deal which would be good for Yahoo! but we are not so convinced it would so good for the market and the advertisers.
The potential benefit of the Yahoo/Mircosoft deal, from an advertiser perspective, was that we would have a sizeable competitor to Google’s dominance. The combination of Yahoo!’s volume and Microsoft’s technology would give advertisers a real choice in the marketplace. A Yahoo! Google deal would cement Google’s dominance even further.
We are watching this story unfold and will be brining you further opinion as we work to anlyse how this could affect advertisers on the ground.
You can read the Reuters story about the rumoured deal here.
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3 Comments
I’m calling Yahoo’s bluff on this one - it seems like a way to show Microsoft that they are not the only option but whether they would actually rather cave to the big G than MS is questionable, especially as they are probably worth less to Google than Microsoft.
From Google’s perspective this is probably an easy way to reverse declining clicks and also indirectly challenge the MS / Y! merger - like you suggest, two smaller competitors are easier to challenge (in a strickly non-evil way of course) than one larger one.
With talks of a Yahoo / AOL marger it pretty much seems like Yahoo are the industry bike at the moment, prepared to give anyone a go just to prove to Microsoft that they are not the only option. Whether this is for any other reason than to try and push up the value of the Microsoft offer is probably questionable.
Yeah but look at Ask Jeeves 5 years ago. They were one of the big players and then handed all search results to Google. It was a good business case in that they made the same, or more, money but without the staff. But when they did that [as far as I am concerned] they lost any USP in the market. And where are they now? ….
Struggling to find a niche last time I looked…
I liked their attempt to differentiate by adding bells and whilstles to the SERPs - it was like having a load of Firefox extensions built in! Apparently they’re going after the middle-aged female audience now though, which basically sounds like they are saying that they’re not going to do anything to grow and just run with the users they’ve got.
The thing is that having a paid search offering is never a USP in the consumers’ eyes - they won’t even notice. The problem for Jeeves is that they stopped innovating. Years ago they should have been focusing on having a search engine that understood symantics and languages better so it could answer actual questions (a la http://www.trueknowledge.com/) because that would have had a natural fit with the ‘human face’ of Jeeves. Google will find you pages that talk about the year JFK was shot - Ask should have been the first engine capable of simply offering the answer.