Yahoo has entered into a 10-year agreement with Google today to display AdSense advertisements linked to search keywords. Under the terms of the deal, Yahoo will choose keywords which display Google’s AdSense advertisements within the results. The deal also includes even more padding against a takeover, which would force Yahoo to pay $250 million if it is terminated due to change in ownernship within two years.
No word yet on what regulators will think of the non-exclusive deal, which still allows bids from competing online advertisers like Microsoft. But if this is the first step in a larger online advertising collaboration, it could mean an even more one-sided presence in the pay-for-clicks ad market.
More news, commentary, and predictions from The Industry Standard:
- Prediction: Yahoo! formalizes search ad deal with Google (Final Community Consensus: 93%)
- Prediction: Google invests $1 billion in Facebook
- Prediction: Google makes bid for Digg
- Analysis: An Open Letter to Steve Ballmer
- Analysis: Microsoft's unrealized online dreams
- Picture This: Yahoo stock drops 10%
- Special Feature: Where are they now? The Industry Standard tracks down 10 dot-coms from the Web bubble of the late 1990s
Comments
I think it reveals that, at heart, YHOO is just another publisher - they started as web editors as opposed to GOOGs efforts to be web organizers. If GM is just a vehicle finance company it makes sense for them to outsource key R&D and if YHOO is merely a source for content it might make sense to just take the higher CPMs. That being said, the long tail challenges that limit their ability to deliver better CPMs through Panama are only exacerbated by allowing GOOGs advertisers access to YHOO inventory.
Bill
more thoughts at http://blog.workhound.co.uk
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