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Wall Street Journal: Yahoo-Google Deal Advances
poster_boy

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3628865 posted 6:41 am on Apr 17, 2008 (gmt 0)

Yahoo Inc. moved closer to outsourcing its search advertising to Google Inc. after an initial test of the system yielded what the two firms deemed positive results, people familiar with the matter said.

A partnership could give Yahoo some needed leverage as it tries to ward off an unwelcome $42 billion bid from Microsoft Corp. Some view the potential pact as mere gamesmanship, particularly in light of antitrust concerns that a Google-Yahoo linkup would likely raise.

A search-ad deal could complicate Microsoft's efforts but is unlikely to derail its plan. Yahoo could simply pull out of the partnership should it agree to be taken over by Microsoft, people familiar with the matter say.

Still, a Yahoo partnership with Google is now increasingly likely, the people said. Yahoo and Google said last week they would undertake the preliminary test in order to evaluate the potential of a broader search-ad outsourcing arrangement.

Such a deal could increase Yahoo's cash flow by more than $1 billion a year, according to Citigroup Global Markets analyst Mark Mahaney. The reason is that Google's system generates significantly more revenue for each search query than Yahoo's does.

Wall Street Journal [online.wsj.com]

 

TinkyWinky

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3628865 posted 12:29 pm on Apr 17, 2008 (gmt 0)

What a climbdown - good going Jerry you really saved the gang with that one!

weeks

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3628865 posted 12:33 pm on Apr 17, 2008 (gmt 0)

This does not surprise me. Most ad buyers are lazy/busy (pick one). Ask anyone who has tried to sell ads for a secondary publication in any market. Ad buyers want to go to one place, then move on. They have "advertised." There, that's done. That one place as far as contextual ads go, is G.

I feel for Y, but the truth is I have friends who, for reasons that go back into a long distrust of G, insist on using Y ads instead of G ads on their web sites. The Y ads are terrible.

A billion dollars is a lot of money, in my opinion.

Murdoch

5+ Year Member



 
Msg#: 3628865 posted 1:07 pm on Apr 17, 2008 (gmt 0)

So wait. Will it be Yahoo ads on Google or Google ads on Yahoo?

And the most important question, will they have an option to opt out of either search engine?

If it is Google ads going on Yahoo, you can bet that many advertisers will drop out seeing as how the minimum adwords CPC is typically much higher.

Oh well. At this point I'm actually hoping for the M$ takeover.

bwnbwn

WebmasterWorld Senior Member bwnbwn us a WebmasterWorld Top Contributor of All Time 5+ Year Member



 
Msg#: 3628865 posted 1:26 pm on Apr 17, 2008 (gmt 0)

Since I use Google and Yahoo for the same keywords for the same sites at the same time how will I keep from paying twice if my ad shows twice on Goggle due to this partnership.

I will find it really hard to believe they will be able to mesh the two together to keep this from happening.

poster_boy

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3628865 posted 1:59 pm on Apr 17, 2008 (gmt 0)

Since I use Google and Yahoo for the same keywords for the same sites at the same time how will I keep from paying twice if my ad shows twice on Goggle due to this partnership.

From the article:

"The overlap between Google and Yahoo could make it hard to get a deal past regulators, analysts say. But the two are exploring ways to address potential regulatory problems, people familiar with their discussions say. Possibilities include limiting the partnership to specific groups of search queries or regions, for example."

Based on this, my unvalidated assumption was that there would be no overlap - as lines would be drawn (somehow).

And, being that I believe this to be true...

"Such a deal could increase Yahoo's cash flow by more than $1 billion a year, according to Citigroup Global Markets analyst Mark Mahaney. The reason is that Google's system generates significantly more revenue for each search query than Yahoo's does."

...my guess would be that Google takes the majority of the split.

maximillianos

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3628865 posted 3:19 pm on Apr 17, 2008 (gmt 0)

...my guess would be that Google takes the majority of the split.

Doubtful. That would not help thwart the MS takeover. They will be generous. It is money in their pocket they did not have before no matter how small the take. Plus they will get some search query data from their top rival to analyze... priceless.

jimbeetle

WebmasterWorld Senior Member jimbeetle us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3628865 posted 3:41 pm on Apr 17, 2008 (gmt 0)

So wait. Will it be Yahoo ads on Google or Google ads on Yahoo?

Since I use Google and Yahoo for the same keywords for the same sites at the same time how will I keep from paying twice if my ad shows twice on Goggle due to this partnership.

Google will be serving ads on Yahoo if this partnership goes through, not Yahoo serving ads on Google.

blaze

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3628865 posted 4:33 pm on Apr 17, 2008 (gmt 0)

Yeah, I could see them giving it away for free.

a - it thwarts MSFT, which is critical.
b - the more clicks / impressions, the more consolidation / higher the bids on Google.
c - they get a lot of critical data out of Yahoo (basically, a list of IP addresses that use Yahoo but don't use Google), before they get taken over by MSFT, which could be hyper critical when they decide to compete with Microsoft directly if they take over Yahoo.

It's a huge win for Google. The money is mere icing.

chrisuk

10+ Year Member



 
Msg#: 3628865 posted 4:58 pm on Apr 17, 2008 (gmt 0)

What about Yahoo's huge network of properties and partner sites all over the world that carry their results, what happens to Panama system? They just turn it all off or integrate the two sources of ads.

jimbeetle

WebmasterWorld Senior Member jimbeetle us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3628865 posted 5:29 pm on Apr 17, 2008 (gmt 0)

Good question on the network, haven't seen that addressed as yet.

ByronM

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3628865 posted 9:54 pm on Apr 17, 2008 (gmt 0)

If you ask me this is basically Yahoo handing over their sovereignty. Wonder what google will do when they realized they paid a potential billion dollars for nothing but click fraud!

Hugene

10+ Year Member



 
Msg#: 3628865 posted 3:10 pm on Apr 18, 2008 (gmt 0)

I think G has the technology to detect click fraud from partner networks: isn't that what they have been doing with AdSense all along.

Basically, Y + friends have spent billions build quality web publications, and now G is going to monetize it and make a large chunk of cash on their backs.

I wish I had come up with G's business model 10 years ago, simply brilliant.

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