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The Impact on Google Adsense of Microsoft Buying Yahoo
Will a true competitor finally emerge?

 4:55 am on Feb 6, 2008 (gmt 0)

Google supposedly thinks the projection of online advertising dollars going into the stratosphere in the next few years as the real reason behind Microsoft's intention to take over Yahoo.

If the acquisition is approved and does happen, what will be the impact on Adsense?

Adsense has been considered by many to be far superior than YPN (Yahoo Publishing Network). But if Microsoft takes it over, will we finally see a strong competition for Adsense?

Will the new YPN become almost as good, or, let's dream big here for a second, better than Adsense?

If the competition heats up, there will be a war on for accounts, and presumably our EPC will go up?

What kind of developments and level of earnings benefits do you project from Yahoo being bought by Microsoft?

What incentives will MSN offer to lure us away from Adsense? What counter offers from Google?




 6:04 am on Feb 6, 2008 (gmt 0)

If you combine MS and Y!, they aren't summing their competence, they are summing their incompetence.

As much as I would love for there to be a good alternative to AdSense, the truth is that neither of those companies has come up with a winning product in at least 7 years. They are both riding on legacy market share.

The best chance we have is for them to open up some ground in that second tier that they currently occupy for someone else to come in.


 6:09 am on Feb 6, 2008 (gmt 0)

No more combined than the two do now separately, added together.


 6:17 am on Feb 6, 2008 (gmt 0)

I wouldn't give the possibility of a buyout much credance.

Reports I'm seeing says Yahoo is looking at other options... including an alliance with G. Of course, that could just be blowing smoke to make MS raise their offer.

Whatever, nothing is even close to being a likely scenario.


 6:28 am on Feb 6, 2008 (gmt 0)

What incentives will MSN offer to lure us away from Adsense? What counter offers from Google?

Counter offers? My but aren't we getting ahead of ourselves?

Personally, I feel that small publishers already have it pretty good. The situation is certainly far better than the 1999-2002 period, before AdSense was launched. IMO the best-case scenario is that the next couple of years are basically a wash. Worst case, we experience an overall decline in free SE referrals and our eCPM also drops.


 9:18 am on Feb 6, 2008 (gmt 0)

The competition (if any) will heat up for the acquisition of advertisers not publishers, 99.98% of publishers are a dime a dozen nowadays. The trick is to become part of the 0.02% club if you want to feel any impact.

At best, and if all goes well, meaning they finally figure how to target the right ads into the right pages and audience (super unlikely), and MicroWho! goes international (the day after pigs take to flight), and they build search momentum (read: learn to code), only then average publishers might possibly have a remote chance for a fall back low paying network - MicroWho!


 4:00 pm on Feb 6, 2008 (gmt 0)

The two biggest things Yahoo needs to work on (and Google should never stop trying to improve) are:
* relevance of the ads to the page
* compelling copy in the ads themselves
On days when my earnings seem lower, I've noticed many of the ads just don't make you want to click. I've also seen variations, from one day or week to the next, in how well targeted the ads are to the copy on the page. The more targeted, and the more compellingly written, the more likely people seem to be to click - which is of course good for us and good for Google and/or Yahoo.

BTW, I think the name MicroWho! is great.


 4:04 pm on Feb 6, 2008 (gmt 0)

Once Microsoft and Yahoo merge, whose advertising and publishing program are they going to use? Yahoo's or Microsoft's? Have you ever tried to use Microsoft AdCenter? Adwords is such a better product from an advertiser's perspective.

But for advertisers, it comes down to much more than just the advertising tool. It's traffic and conversions. Microsoft and Yahoo combined don't come anywhere near the traffic that Google can generate for advertisers. Most serious advertisers are going to put their money into Google first and Microhoo second.

If Microsoft and Yahoo merge, it's going to be a while before they merge all their common apps. It seems to me when you merge apps that aren't very competitive to begin with, you can't assume the sum of the two will be better than the individual products. And it's not going to happen overnight. If Microsoft buys Yahoo, Google's share of the advertising market will probably climb as the merged companies struggle to figure out what to do. I wouldn't count on them being a serious competitor to Google for quite a while.


 4:08 pm on Feb 8, 2008 (gmt 0)

It will just be good to have some competent competitor.
Adsense will still dominate for years to come.


 5:29 pm on Feb 8, 2008 (gmt 0)

As far as i know Microsoft does not have publishers base. Buying Yahoo could help them to fix this. Who knows, maybe MS would be able to improve targeting problem. Not even sure if targeting is really a problem for Yahoo. Lack of advertisers could look like targeting problem (i.e. Yahoo would better serve irrelevant ads than nothing).


 9:19 pm on Feb 8, 2008 (gmt 0)

In my opinion Google's strength in their advertising program was their global reach - both advertisers and publishers. Yahoo has neglected this for many years and is facing this problem because of that.

If Microsoft and Yahoo merge it'll be difficult for Google to rule the Average Joe Internet market for very long - Google's search and ad program will still rule but their web services will suffer a bit as Microsoft will surely bundle up a lot of the yahoo services into windows.

So Google in a way will become the Apple of this century - where their web services will be considered great but for an average internet user with a windows pc - he/she will have everything she needs out of the box.


 10:19 pm on Feb 8, 2008 (gmt 0)

If Windows were all that by default, then Live Search would already have gotten more of a market share, which has not happened yet. Even Yahoo, being default for AT&T/Yahoo ISP users, has not increased enough to significantly impact Adwords and Adsense.

No threat to Adsense publishers IMHO, other than how it would affect the SERPs and those still doing arbitrage.


 1:49 am on Feb 9, 2008 (gmt 0)

If the competition heats up, there will be a war on for accounts, and presumably our EPC will go up?

Now that is a big "IF". If the compettition were to heat up who do you think the rival companies are going to try to please? The publisher or the advertiser? I would imagine that our EPC would only fall as a result.

What incentives will MSN offer to lure us away from Adsense? What counter offers from Google?
Very little to none.
Why? Because whoever wins/retains market share will be in demand by publishers. Not the other way around.


 6:55 am on Feb 9, 2008 (gmt 0)

i don't think Yahoo will move out of US for advertising network. They would have given a big fight to Adsense if they had been fast enough to launch all over the world.


 10:56 pm on Feb 9, 2008 (gmt 0)

More competiton at best is going to be competition to catch more advertisers.

Fighting for advertisers is likely to be a.o. on a price level and we (publishers) will pay for that fight in the end.

So the best thing for us is to not have MSFT gain control of Yahoo! (Even not if you don't like Google and/or are using YPN (hence you're US based) )


 1:54 am on Feb 11, 2008 (gmt 0)

Chicago Tribune Sunday 2/10/08 (synopsis)

Yahoo board is declining MS offer, says "price is too low for the risk (of federal action against such a consolidation)... Balmer quoted as saying he wants deal to go thru under Bush 'business-friendly' administration, willing to raise the ante to speed things up. Article notes that this could just be stalling for higher price on Y's part... also: MS stock, which is part of the stock/cash buyout offer, has declined during recent wall street troubles, which lowers price MS would actually be paying.

Don't bet on this thing going forward.


 4:18 am on Feb 11, 2008 (gmt 0)

Good, maybe the whole deal will be off. I think that will be a BIG relief for most AdSense publishers.


 4:59 am on Feb 12, 2008 (gmt 0)

Hate to say it, but Yahoo has blown it again. The company isn't worth what MSFT already offered.

Yahoo has made error after error, since they took on first, Tim Koogle and then Terry Semel. Neither of them understood the culture or the organism. Now the slippage has been so severe, they are trying not to be taken over.

If I was a stockholder, I'd be incensed. The Microsoft offer was a 61% premium over the current share price and these morons in the board room think it's not enough?

They'll be lucky to end up with a couple of nickels to rub together by the end of this.

Yahoo hasn't had a leader with vision since 2001 and bringing Yang back is too late. He's not up to the challenges.


 8:29 am on Feb 12, 2008 (gmt 0)

SAN FRANCISCO -- Just hours after Yahoo Inc. spurned its unsolicited takeover offer, Microsoft Corp. on Monday set the stage for a fight by pledging to clinch the technology mega-deal by any means necessary.


Google should make a bid!

Microsoft can't compete.

Can you imagine Google controlling 80% of searches? If Google is smart it will turn this threat into an opportunity. Its stock would also go through the roof--again!


P.S. Anyone remember the days when Yahoo search was "powered by Google"? That could happen again. 8->


"While assessing its response to Microsoft, Yahoo's board also examined a wide range of alternatives that included forging an ad partnership with Google, which paid nearly $5 billion in marketing commissions to thousands of Web sites last year."


 9:02 am on Feb 12, 2008 (gmt 0)

Business Week:

Yahoo's reticence has raised the tantalizing possibility that it might

. . .

Outsource search advertising to Google.

Among several admittedly unlikely options, this one has the most credibility.

. . .

Yang has recently considered outsourcing at least Yahoo's European search business to Google, according to published reports. Such a deal might well make Yahoo radioactive to Microsoft.




 10:38 am on Feb 12, 2008 (gmt 0)

Don't write off the Micro-Hoo combo just yet.

How many post have we all read complaining about Google and how we wished someone would come along and give them some stiff competition.

Well this might be the best hope yet. Both companies have plenty of smarts on the payroll and if they can put a good search platform together then we might see a good scrap!

Unless we want to live in an online world that is completely dominated by Mr. G
we all better cross our fingers and hope for the best.

If not M&Y then who? There is no one else on the horizon that has the slightest chance of heading off the Google Juggernaut.

Anyway they will be my dog in this fight!...KF


 8:40 pm on Feb 12, 2008 (gmt 0)

I don't think a better search is going to be the tipping point.

Here is the issue I think Y/M and every other potential competitor has.

Google makes money from google search results and via publishers from yahoo and microsoft search results based on publisher site listings within serps.

Yahoo makes money on yahoo serps

Microsoft makes money on msn serps

When I start seeing yahoo and/or microsoft making substantial money off of Google's userbase I believe there will be another dog in the hunt.

Until then, I think people are ignorant to the reality of Google's market position because of it's adsense publisher base.


 2:47 pm on Feb 13, 2008 (gmt 0)

Will the new YPN become almost as good, or, let's dream big here for a second, better than Adsense?

Not likely, simply because AdSense has such a dominant market share among both publishers and advertisers. Also, critical mass would be difficult to achieve even if AdSense weren't around.

I think there might be opportunities for competitors within certain verticals, if those competitors have enough expertise and contacts with mainstream corporate advertisers, agencies, and media buyers. That's already happening on the display-ad side, which is a much different ballgame from AdSense-style text ads.


 7:21 pm on Feb 14, 2008 (gmt 0)

Dictatorships are bad for nations.

Monopolies are bad for commerce.

Lets face it Google is a de facto monopoly! When any company commands around 80% of the market (search)they are the proverbial 800 pound gorilla setting in
the corner of the room.

Monopolies can set the price for their raw goods(publishers)and charge the
price they want to their customers (advertisers).The resulting spread (gross profits)are extremely healthy and allow them to grow even larger.

Who among us are making more from Adsense than we did 4 years ago? Who of us are paying less for Adwords than we did four years ago. If we are ahead it is due to increased volume and hard work, not to the benevolence of Google.

To those who say Google is unstoppable just look back and remember when Yahoo
was riding high and AOL and a host of other companies both search and otherwise were the big boys on the block.

How will it all sort out, take your best guess.

We live in interesting times!...KF


 7:44 pm on Feb 14, 2008 (gmt 0)

Monopolies can set the price for their raw goods(publishers)and charge the
price they want to their customers (advertisers).

They can? You mean that AdSense really isn't an auction-based system? And what about all those lowball clicks that people are always complaining about? One would think that, if Google were a monopoly that could set prices arbitrarily, minimum bids would be higher than they are.


 8:48 pm on Feb 14, 2008 (gmt 0)

Who among us are making more from Adsense than we did 4 years ago?

If you are making less than 4 years ago, it might be a function of your work versus adsense. With four years worth of work it is not difficult to be farther ahead - imo.


 9:52 pm on Feb 14, 2008 (gmt 0)

Well said Kaz. Four years down the line and if you are making less from anything, let alone Adsense, you have to ask the question, is it me? Six months down the line more like.


 10:38 pm on Feb 14, 2008 (gmt 0)

>>> If we are ahead it is due to HARD WORK and INCREASED VOLUME <<<

Yes I am ahead of where I was 4 years ago due to the above factors.

For those that aren't (they are legend) I guess you are saying its them not

the system...KF

[edited by: King_Fisher at 10:42 pm (utc) on Feb. 14, 2008]


 1:43 am on Feb 15, 2008 (gmt 0)

I wouldn't say that there are that many making less. If, as you say, they are legend, its because they tend to a lot of posts about their woes. It's more of a noise factor, not quanity.

I'd reckon that those who have increased their earnings are way, way beyond the majority.


 3:02 am on Feb 15, 2008 (gmt 0)

Dibb, Good point, well reasoned!...KF

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