europeforvisitors - 8:05 pm on Mar 9, 2005 (gmt 0)

I think everybody on this board is missing the threat. Yahoo (and later MSN) coming in will be a disaster for us all. Can you imagine doubling (or more) the advertising space available to advertisers and the price for advertising space to remain the same? No way, price for space will drop very significantly for all advertisers, both on G and Y and so will our revenue. It is just a simple demand and supply law. As soon as Y is in the game expect your revenue to drop, big time.

Not necessarily. The demand for PPC ad inventory has been growing (which may be one reason why Google has been slow to deal with "scraper sites" and other made-for-AdSense junk sites).

There could excess inventory in some categories, especially for ads that get distributed to many thousands of sites. But in other categories, there may still be a shortage of inventory. We'll have to wait and see.

The entry of Yahoo into the marketplace could be a good thing for advertisers and for publishers who have clean, high-quality sites in profitable niches. If overall cost per click does fall due to excess inventory, then Yahoo and/or Google will have an incentive to provide higher-quality referrals by purging junk sites that may be sucking up impressions, clicks, and ad budgets without delivering value to advertisers.