Last week Google and Yahoo announced an agreement by which Yahoo would be allowed to selectively serve Google ads along side search results on Yahoo.com and Yahoo’s partner sites, and take advantage of Google’s Content ad platform as well. Yahoo will have complete control over whether Google ads, Yahoo ads or some mixture are fired.
Back in April, Yahoo began a test with Google running Google ads on something like 3% of Yahoo impressions. This was undoubtedly a “proof of concept” test, and apparently both parties were pleased with the results. Why wouldn’t Google be pleased? They picked up additional revenue simply by adding another, more substantial than average, syndication partner for its “AdSense for Search” product. Yahoo clearly made more money serving Google ads than it made serving its own.
If federal regulators let this happen – a pretty big “if” – Google and Yahoo both win, and Microsoft would lose out. Yahoo will have successfully fled from a hostile takeover bid by Microsoft by throwing itself into Google’s arms.
But what about the advertisers?
Let me know what you think!