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Google's Contract with Yahoo

Extended upto September ?

     
10:28 pm on Jul 10, 2002 (gmt 0)

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Seems yahoo have extended the google contract for another 3 months until september.Some breathing space to me since i have some excellent google rankings now :). See the end of the article http://news.com.com/2100-1023-942888.html
10:32 pm on July 10, 2002 (gmt 0)

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Thanks Gopi, and good find! I hadn't heard about this yet. This is very good and long anticipated news.
10:33 pm on July 10, 2002 (gmt 0)

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That's the same time the AOL/Inktomi Deal ends... September could be an interesting month
10:41 pm on July 10, 2002 (gmt 0)

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press release [cbs.marketwatch.com] - actual press release doesn't mention it.

I'd say it was mentioned in the conference call but haven't checked yet: [corporate-ir.net...]

12:16 am on July 11, 2002 (gmt 0)

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More here:

reuters [reuters.com]

12:29 am on July 11, 2002 (gmt 0)

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September is good timing for the Holiday season when it will be too late to optimize a site for any Yahoo switch.

The only choice remaining, PAY FOR CLICKS.

All these coincidental timings have one purpose of being. Screw the SEO. Start paying up past balances on your credit cards. You'll need full use of them after September.

3:14 am on July 11, 2002 (gmt 0)

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i like my free traffic thank you very much and prefer not to pay :)

Tor

7:39 am on July 11, 2002 (gmt 0)

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My guess is thet they will drop Google for Fast in September.
7:51 am on July 11, 2002 (gmt 0)

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I agree.. Seems like they will drop Google.
:(
7:59 am on July 11, 2002 (gmt 0)

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Good news...till September.

I hope they will not drop Google.

8:24 am on July 11, 2002 (gmt 0)

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Well, I think Yahoo will probably suffer some if they drop Google BUT I also think Google needs competition.

Teoma or FAST will certainly benefit a great deal if they land the Yahoo contract. The exposure will boost whoever wins the deal, and that means all of us won't have all our eggs in one basket anymore.

Most of us have seen what happens when Google issues a penalty or if a site drops out of Google for a while. We suffer. It is very much to our advantage for Yahoo to deal with somebody else.

And it's a bit difficult for me to say that, because I really do love Google. But Google can be a cruel and painful mistress at times. I want to have a lover on the side for those occasions when she storms out of the house. So to speak. ;)

8:36 am on July 11, 2002 (gmt 0)

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What makes some of you think they are going to drop Google ?

I would say that Google is definitely the consumers choice, and the only reason I could see for them to move is that becuase of google's enormous name recognition people opted to search at google rather than Yahoo.

Whereas Teoma and Fast, are not very attractive websites in themselves.

8:49 am on July 11, 2002 (gmt 0)

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It's of course just a guess but if Yahoo was interested in a new long term contract with Google why did they only extend the partnership until September? Seems to me they just need the additional time to get the change done properly.
8:54 am on July 11, 2002 (gmt 0)

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Visit_Thailand

You are right that Google is the consumer choice - that is why Yahoo will probably drop them.

It might be believed that Yahoo's original idea to use Google was the catalyst that allowed Google to overtake Yahoo et al as quickly as they did.

Yahoo needs to protect its future and FAST is less of a threat.

IMO Yahoo can't win either way. The more web-savvy a punter gets the less they use directories.

9:03 am on July 11, 2002 (gmt 0)

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I agree 4eyes, in the earlier days everyone who thought search thought yahoo, but now and for quite a while they would think google.

Even if Yahoo changes I doubt the public will care as they still have google.

Google and ODP IMHO give the most accurate results without trying to get you to sign up for this that and a million other things.

10:25 am on July 11, 2002 (gmt 0)

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I now predict a renewal. When Yahoo and Overture extended for a short period, everyone here went NUTS that it was going to be Google+Adwords. We were all wrong.

A lot of statements were made about Yahoo's choosing Google made Google competitive. I believe, now, that this was a negotiation tactic. At this point, choosing Fast would be suicide!

For years, Yahoo = Search. Now, Yahoo = Search for only 35% of the world. Another 35% see Google=Search. And 30% just type words in a search box (MSN/AOL/smaller players).

Yes, Yahoo gave Google the creditibility to overtake them, but it might have happened anyway. Google become the Geek's choice, getting some mainstream traffic via word-of-mouth. As everyone here can attest, Google traffic is FAR inferior to MSN/AOL/Yahoo traffic. We go for Google because it is BIG and FREE, but if it was as expensive as other traffic, we wouldn't go for it.

Regardless, the damage is done, and Google is a huge search engine. What does dropping Google for Fast do for Yahoo strategicially?
1. Admit to the world that they are threatened by Google -- the articles in the press will be about how Yahoo was scared to use the best search engine any longer.
2. Decrease the quality of their search results, which will over time cost them visitors.
3. Give Fast HUGE PR - making them a reasonable competitor over the next 2 years.
4. Give Google HUGE PR - articles all over the place about how they have been kicked out because they were too good.

The result? At BEST for Yahoo, the 67% of searchers that CHOOSE a search engine (Yahoo/Google users) will split three ways instead of two ways. At worst, Google makes a HUGE grab and Fast and Yahoo split (down the middle if the last deal was indication) a much SMALLER piece (20%-30%).

I mean, Yahoo could do something retarded, but they have to realize that Google isn't going to collapse if they drop the deal. And Google stole a lot of Yahoo's traffic over two years, Fast (alltheweb.com) would do the same with the next deal.

Yahoo should have spent the last year building (or buying) and in-house SE to replace Google. Then this would be a moot point. They could have bought Altavista or Wisenut on the cheap. Instead, they made their bed, time for them to lie in it.

Alex

10:39 am on July 11, 2002 (gmt 0)

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Alex_h,

Yahoo could also negotiate an imperative 5% or more share deal with Fast as part of the deal of feeding Fast results. I am not so sure Fast has any substantial value at the moment, but performance-wise they look to be the only contender to Google. That could be a cheap way in.

Yahoo already has a 5% share in Google. Google's value should be a billion dollars or so and rise steadily. Yahoo paying Google a few million dollars or not for showing Google's results will not change much in the valuation of Google in my opinion. I would suppose Yahoo would have to pay much less to FAST at this moment.

10:43 am on July 11, 2002 (gmt 0)

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I belive FAST have a policy of not competing directly with their partners, which may sway it.

Unless Yahoo can differentiate themselves from Google, they will struggle to get their traffic share back.

If they go with FAST then they may loose traffic anyway (although not as much as if they go with Inktomi)

Its a 'rock and a hard place' situation.

11:11 am on July 11, 2002 (gmt 0)

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Google wasn't a search engine play when Yahoo picked them up, they were a technology company. They originally tried to sell the technology to Yahoo before they raised money and started Google.

The 5% stake isn't that important. Even if worth hundreds of millions of dollars, it is a one-time item. If/when Google goes public, Yahoo can certainly get cash for selling their stock, but that isn't necessarily helpful. Its a one time item, and won't count towards the operating profit of Yahoo. Given that Yahoo doesn't have a cash crisis, its not that useful.

What is useful for Yahoo, is that it likely comes with a seat on the board.

We'll see, it all depends on how flexible Google is to win the contract. They don't need Yahoo for credibility anymore, so its a matter of cash. Yahoo has to decide between paying for great search (Google), or getting paid for mediocre search (Inktomi), with Fast somewhere in the middle. Given my poor experiences with Lycos hosted search, I'm not convinced that Fast has the capability to feed a Yahoo, but who knows.

I think that Yahoo needs to realize what AOL realized, good quality searches is more important than small money. Besides, WATCH a Yahoo user use Yahoo, they click on a LOT of Overture ads. I would guess that Yahoo would suffer from decreased traffic, but who knows.

I think that the Google competition is a moot point, they don't grant Google anymore competition, and the money isn't as important to Google as it was two years ago. A "company policy" of not competing with your clients doesn't seem that meaningful, to be perfectly honest.

Alex

Alex

11:30 am on July 11, 2002 (gmt 0)

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I'm still betting that this contract extension has more to do with the questionable future of Yahoo's "Directory" rather than "Web" search.

My previous comments [webmasterworld.com]

Their directory is outdated and garbage. It's making them virtually no ka-ching in the grand scheme of things. It's going to come down to who's got a directory (or wants to take over Yahoo's) and who can make that directory "play nice" with the web search results provided by Player #2 (most likely, still to be Google). Watch for big movement over at SBC/Prodigy/YourLocalTelCo this summer.

G.

12:32 pm on July 11, 2002 (gmt 0)

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With all this talk about Fast, what about Inktomi? Have they officially dropped out of the race for Yahoo? Are they the long-shot choice for Yahoo?
1:29 pm on July 11, 2002 (gmt 0)

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Well Yahoo has some companies to choose from.
Inktomi www.inktomi.com
Google www.google.com
FAST www.fast.no or www.alltheweb.com.
Overture www.overture.com
Today they have a contract with google, and it has only been extended up to september. Which in my view means they are going to someone else than google. In my opinion is FAST and Overture who is closest to get the contract.
2:13 pm on July 11, 2002 (gmt 0)

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Is there any specific reason they wouldn't head back to Inktomi? Other than the quality of the index of course.
2:55 pm on July 11, 2002 (gmt 0)

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Yahoo will not do the same error twice. When Y! customers see " Powered by Google" What happens do you think ? Customers take a look at www.google.com

It's the same thing with fast... Y! customers will visit fast.no or alltheweb.com

Inktomi is the only choice. Go to inktomi.com and try to do a search. Good luck :)

My guess is that they will drop Google for Inktomi in September; because:

-Inktomi will be out of AOL in september...
-Google extented contract with Y! will end in september
-Coincidence ? :)

-Inktomi is not competitive with Y! (Fast will be; like Google is)
-Inktomi PFI is top notch
-PFI from Fast has bugs with some kind of sites.

GoInkGo ; my name say it all ;)

3:08 pm on July 11, 2002 (gmt 0)

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When contract negotiations are extended, 99.99% of the time it means the previous contractor already has the contract. The extra time is to argue about the details and to allow the parties time to mentally adjust. A case of sticker shock or buyers remorse, can take up to 90 days to get over it.
3:10 pm on July 11, 2002 (gmt 0)

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Do you work for Inktomi? I mean only a dedicated employee would be rooting that such an inferior and not to mention lousy for the SEO community database would be put back in place as Yahoo's web results provider!

I agree w/ Alex, and for the sake of my future Xmas traffic....I really hope we're right.

3:31 pm on July 11, 2002 (gmt 0)

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When contract negotiations are extended, 99.99% of the time it means the previous contractor already has the contract.

Was the remaining 0.01% of the time when AOL extended their Inktomi contract for a month and then went to Google?

In the real business world, perhaps it is 99.99% but these people are not in the business world. Unless "milking" investors is considered a business. To even begin to figure out what they will do one must think like either a predator or a wounded animal.

7:28 pm on July 11, 2002 (gmt 0)

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Thanks, Brett, for a bit of grounding. My money's on it.
8:03 pm on July 11, 2002 (gmt 0)

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Brett,
I thought in a previous post [webmasterworld.com] you stated that the rumour was that the Yahoo/Fast deal was just about completed?

You don't seem so confident now ;)

It does seem that it is still up in the air though. Fast certainly seemed to hint that they might well get the Yahoo deal, and Google have been very quiet on the issue...now I am not sure what to make of it. I still hope that you were right and that Fast will win. With Google conquering AOL as well, the level of competition has dropped off significantly.

I hate to think of the consequences for sites that receive a PR0 under a Google dominated web :(

8:37 pm on July 11, 2002 (gmt 0)

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Well spotted Stace... and I think your call is a timely reminder of real space Brett. I'll issue new odds when I have the confindence and when I have fully assessed the events of the last 48 hours.
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