jlara - 2:21 am on Jan 22, 2008 (gmt 0)

I was wondering when this "rumor" was going to start being talked about more in public. It is an interesting concept. Is it more cost effective for Yahoo to stop running its own PPC engine and outsource to Google?

On the savings side:
Hardware reduction
Workforce reduction (development, sales, support)

On the loss side:
Controlling their own destiny
Controlling their click costs and splits
Yahoo Publishers Network
Relying on a competitor for a large source of income (Didn't they buy Overture and Inktomi because of this?)

It does come down to what is best for their stock price. Is it more attractive to strip down part of the company and replace part of that income with minimal overhead?

If Yahoo does shutter their PPC dept and switch to Adwords, it could be a very serious indicator that we are in a recession... not just an economic downturn.