Pay Per Click Advertising Advice from Online Marketers

What Yahoo outsourcing would do to Google Adwords

April 10th, 2008 Posted in Yahoo Search Marketing, Google Adwords

The only reason I endorsed the Microsoft takeover of Yahoo was because after thinking about the deal from an online advertising perspective, it would setup a nice healthy rivalry between two technology giants.  With recent Hitwise numbers indicating Google dominating over two thirds of the US search share, it is somewhat disheartening that rumors are flying around about Yahoo in testing phases with outsourcing pay-per-click to Google Adwords.  Now, I like Google a lot, but I also like fair competition and I think the markets do too.

Yahoo is somewhat of a nice playground for pay-per-click marketing because they haven’t quite figured things out to really compete with Google.  They’re hungry for more advertisers, higher bids, and more traffic.  With the substantial network they’ve built from the very beginning of the world wide web, it seems all they would need is a big brother in the technology space.

Enter Big Brother: Microsoft

Microsoft is the big brother Yahoo needs in the here and now.  They have the technology, quality networks of their own, and key partnerships at the ISP level.  Microhoo would mean Google has one direct competitor in the online advertising space.  Two financial and technological giants, two name brands, one goal of search share market dominance.  Sure, Google would have a leg up on the industry in the early-goings of this binary battle, but the opportunity is there for a healthy and much-needed “coopetition”.

What about Google running Yahoo ads?

If the tests go well, the board of directors over at Yahoo have another bargaining chip, but worse yet, Google has an easy-in to usurp more traffic in the market.  If, for whatever reason, the Microsoft bids collapse (which is somewhat unlikely), and Google does take over Yahoo’s sponsored search program, it would mean the end for not only Microsoft Adcenter, but also for open competition in the market.

No one likes a monopoly.

  1. 3 Responses to “What Yahoo outsourcing would do to Google Adwords”

  2. By Marcel Paladin on Apr 10, 2008

    You mentioned Google running Yahoo ads, but the San Jose Mercury news reported that Yahoo is testing Google ads.

    http://www.mercurynews.com/breakingnews/ci_8866039

    What are your thoughts on this development?

  3. By Garry on Apr 10, 2008

    Hi Marcel,

    Right off the top, I mentioned that Yahoo was in testing phases, after reading similar articles to the one you pointed out. Much of my post really examines hypothetical paths Yahoo might take if and when they make a deal.

    Thanks for reading!

  4. By Jason Geater on Apr 10, 2008

    I think this is a sad indicator of how Jerry Yang feels about the future prospects of the company.

    The latest courting of AOL/TW certaining is “Jerry’s Last Stand” in squeezing more money out of Microsoft.

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