MediaVision Blog : Search Engine Marketing

Yahoo! hasn’t succeeded in the great PPC race nearly as much as Google, because they focused more on how much advertisers are spending to determine where to place their ads, rather than on sheer relevance. Is it no surprise then that they are running to Google to try a last resort and probably ineffectual boost to their overall share value? Yahoo! co-founder Yang is still too stubborn to go into a more substantial partnership with Google. The two week trial of placing AdSense into Yahoo! search results is set to take up only 3 percent of their ad space. It goes to show that sometimes following the leader (Google) is the more profitable venture.

The problem they face now is that the US Justice Department is burrowing its nose into the deal and taking a sniff. The working together of the search companies raises obvious antitrust concerns. Shamelessly hypocritical Microsoft have brought up the issue in an attempt to keep Google from interfering and foiling their plans to force a buy-out, claiming that a Google-Yahoo! collaboration would decrease competitiveness in the search ad market, “in sharp contrast to a Microsoft-Yahoo! partnership”. It begs me to coin a cliché involving one pot and one kettle.

Now the DOJ are watching the AdSense deal with hawk-eyes. Raised prices usually result from a monopoly domination of a product such as search advertising. The two search leaders are apparently “playing ball”, and facilitating the investigation with full cooperation. That is the outside perspective anyway.

The heat is on for Yahoo! now. The three week ultimatum from Microsoft will meet its end this weekend. Jerry Yang’s belief in a financially successful Yahoo! in the near business quarters will have to be enough to drive them out of the closing hands of Microsoft once and for all. He is reportedly confident that Yahoo!’s value is beyond the $44 billion cash/stock MSFT offer. In my imagination, his expression must currently be quite similar to that of Martin Luther King waking up in the middle of a Ku Klux Klan annual meeting.

Things are becoming somewhat chaotic and a bit of luck might help Yahoo! in its last minute wrestle for freedom. It seems partnering on a small scale with Google and merging with AOL are perhaps slightly weak, late resorts. I am looking forward to this weekend’s predicted resolution.