Are you an advertiser with Yahoo Search? If yes this news will benefit you. HOW?

First the news.

In June 2008 Google and Yahoo announced an Ad showing deal where Yahoo was to show ads of Google Advertisers in their search and partner results.

However it wasn’t a smooth ride as some advertisers and government regulators raised concerns about the deal. Here are some threads of webmasterworld that clearly shows webmasters were concerned over the deal:

Yahoo and Google announce advertising deal

Microsoft Wages War Against Google-Yahoo Ad Deal in Washington

Google Yahoo Ad Deal In Doubt Over Potential Antitrust Restriction

Apparently it seems there were too many road blocks that Google ultimately called it off.

Google in its blog says:

Quote:

However, after four months of review, including discussions of various possible changes to the agreement, it’s clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn’t have been in the long-term interests of Google or our users, so we have decided to end the agreement.

Yahoo CEO Jerry Yang was disappointed Google didn’t fight harder for search deal.

It’s easy to understand why Google wasn’t interested in the deal but Yahoo was. It would have given Yahoo more dollars in terms of Ad revenues simply because for many searches – especially the long ones – Yahoo just doesn’t have enough inventories to fill ads. (The deal was supposed to bring Yahoo $250 million to $450 million in additional operating cash flow in the first year. Source: http://www.nytimes.com/2008/11/07/technology/companies/07google.html)

Yahoo has a lot of advertisers in the news, sports, and finance and entertainment categories, but for others it really needs a lot of inventory to fill ads.

The deal was a boon to Yahoo, but not for Google. Secondly because of the concerns it was generating in the advertisers community it was better for Google to call it off – so it backed out.

Now Yahoo advertisers will stand to gain because of this. Why?

First, Yahoo will feel a bit insecure and that would be reason enough to make Yahoo work harder and try to be a better search engine. A proof is the letter Yahoo sent to its advertisers once the deal was over.

Quote:

In short, even in the absence of a commercial agreement with Google, we intend to become an ever-stronger player in online advertising. Our certainty on this front comes from the progress we continue to make in many areas, not the least of which are the significant innovations we’re making in search. We continually optimize our algorithmic and sponsored search. In fact, in 2008 alone, we have developed and launched hundreds of improvements to our search engine, including index expansions and updates, ranking models and performance tuning. Each of these features is designed to improve search quality and deliver a more relevant search experience to our users.

Secondly, due to more advertisers the competition would have increased leading to an increase in keyword bids. It is a well known fact that those who cannot afford Google turn to Yahoo for online advertisements.

An increase in bid prices would have been a setback to small advertisers.

Thirdly, since Google advertisers pay more per click, it needs no rocket science to assume that Yahoo would have shown Google Ads first before showing their own ads pushing the Yahoo only advertiser’s ads to well below their current position resulting in lower clicks. Poor Yahoo advertisers would have then paid more for less clicks.

These are the reasons I think Yahoo advertisers stand to benefit because of this no-deal.

Though I feel Google advertisers, especially those who do not advertise in Yahoo, would have benefited from this deal. Unlike Yahoo advertisers they would have paid the same for more clicks and would have had an opportunity to know how their campaigns were faring in Yahoo if they had analytics in place.

For some strange reason, even Google advertisers were not happy with this deal as is mentioned in the Google blog. I think the reason why they were against it is that most were already advertising in Yahoo and felt no reason to advertise the same ads in Yahoo through Google and essentially pay more per click. (It’s a well know fact that advertisers are willing to pay more per click in Google than in Yahoo.)

Are you happy that this deal is now over?