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Friday

13

Jun 2008

A few hours ago, Yahoo gave up on its talks with Microsoft and decided that a search deal with them wasn’t going to be worth it. Pretty expected reaction considering Microsoft had dumped Yahoo and refused to buy the business as a whole after Yahoo had acted all cheerleader like in the last negotiation. It’s a non-exclusive deal (which means Yahoo can exercise judgment in showing yahoo, google or any other ads), and it’s up for renewal in four years.

So, guess what Yahoo did. Like an insecure little high school girl, they signed a 10 YEAR deal with Google … now Yahoo search is going to show Panama ads, as well as Google ads.It’s a non-exclusive deal (which means Yahoo can exercise judgment in showing yahoo, google or any other ads), and it’s up for renewal in four years.

Okay, I agree that I’m being a little too critical … my bad. I was just hoping that Yahoo could give an interesting fight in the market place … I look forward to good competition in my market place.

As Wall Street reacts, you can see that Yahoo stocks are way down … Google & Microsoft stocks are up. I guess who know who got dumped and desperately found a new boyfriend. Blah!

Jerry Yang’s phone call with investors was interesting, he said there was a possibility that Yahoo could sell Image ads inventory to Google in the deal too. Yeah right, there’s a long way to go before Google gives up on its Image ad potential and decides to take cues from Yahoo.

I think the situation is pretty ridiculous.

  • Reports say that this could add as much as $800 million in revenue each year. Microsoft offered Yahoo $48 BILLION! For the Yahoo share-holders, this increased revenue is going to take decades to come back to them.
  • I certainly don’t think it’s great for competition. Google is a great, innovative company. But if Yahoo & Microsoft all give in, I don’t think it’s going to be good for the whole industry.
  • Who in their right mind is going to advertise on Yahoo Panama any longer? I’ll just place my bets with Google and because of the competition there, Yahoo will be forced to show Google’s ads instead of its own there.
  • I’m not a huge fan of Microsoft Live. They haven’t hit the pulse of customer requirements yet … but Live.come has some interesting new business models (like the one that rewards customers for shopping from there). I would have liked to see Yahoo’s muscle behind that to see if it works …

But as a advertisers and an advertising consultant, I have to admit … my job just got a lot easier.

To all my dear clients, we’re shutting down Yahoo accounts in the next 6 months … although the ROIs are great, it’s going to get harder and harder to gain any traction with such little traffic.

Let’s jump on the AdWords bandwagon!

So, now’s a good time to get started on the Google Platform. Advertise with Adwords. Analyze with Analytics. Test with Website Optimizer.

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