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Yahoo’s last ditch effort to generate additional revenue and thwart a hostile purchase from Microsoft might have provided sufficient impetus for a partnership six months ago, but we’re a long way from the world we all knew then. The government, consumer watchdogs, and advertisers are all raising opposition to the Google-Yahoo ad deal. In today’s Searching for Meaning column, “Suing Google over Yahoo,” Kevin Ryan explains why the drama is far from over.

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The number of small businesses using deeply integrated social networking services will double in the next year, according to projections by Access Markets International (AMI) Partners, Inc. Currently, there are about 300,000 small businesses engaged in social networking, which is 5% of the total number of small businesses in the U.S. AMI expects that number to reach 600,000 in the next 12 months.

“As social networking evolves, we can see the emergence of targeted offerings for business users,” says Nikki Lamba, New York-based analyst at AMI Partners. “In order to attract a greater share of SBs, social networking services must provide customized services that SBs can leverage in order to realize their business goals.”

Social media might be an increasingly attractive option for small businesses in their advertising and marketing efforts. The current economy has businesses scrambling for affordable marketing methods and social media is a possible option, depending on how its leveraged.

Washington is on a bailout binge lately, so you would think they’d hop on board when it looks like the private sector could actually manage to work things out on their own.

Like, I don’t know, the search advertising deal between Google and Yahoo. Yes, there are concerns from the advertisers. But Yahoo keeps posting dismal profits. So, unless something magical happens to Yahoo (like an acquisition by Microsoft - oh wait), then antitrust issues won’t even matter.

But Google has been dropping hints that it might walk away from the deal because of regulations they don’t want to comply with, like caps.

It’s been projected that the deal with Google could infuse $800 million of cold hard cash into Yahoo in a year’s time. That certainly wouldn’t hurt. Of course, Yahoo would need to manage that influx well, and therein lies the problem. Perhaps regulators don’t think the deal, which could hurt advertisers, would ultimately save Yahoo.

Adding fuel to that fire is that regulators have been lobbied hard by Microsoft, who is probably looking to watch Yahoo’s stock fall into the single digits before coming back to pick it up. Microsoft may be struggling to grow its search market share, but as a whole, they have a ton of cash on hand and will weather the economic storm. Acquiring Yahoo (especially if a merger with AOL takes place) could create a stronger second place finisher in the search engine market, which would reduce anti-competitive concerns, indeed.

Bill Tancer, the General Manager of Research at Hitwise and one of the keynote speakers at Search Engine Strategies Chicago, will be interviewed by Matt McGowan, Global VP of Marketing at Incisive Media, during an SES Webcast on Friday, Nov. 7, 2008, at 1:00 p.m. EDT / 10:00 a.m. PDT. The title of Bill’s presentation is: “We Are What We Search.”

At a time when search engines are rapidly replacing the yellow pages (and news search engines are routinely scooping daily newspapers), Bill has access to a wealth of consumer information about Internet user behavior that was never available before. Bill is well known in the search industry for mining the latest Hitwise data, which is a sample of over 10 million Internet users U.S. and 25 million worldwide, to glean insights on the sites we collectively visit, what we search for and what that tells us about ourselves.

I spoke with Bill yesterday and he shared this news nugget with me: “I’m going to talk primarily about what search term data can tell us about the economy and consumer sentiment. I’ll also spend some time on finding insights on the effect of an economic downturn on search. You might expect that with recent contractions in online retail that search traffic to that category would be declining….Our data (while showing a recent small drop-off) indicates that search traffic to retail is up over the previous year….”

Bill’s webcast will cover other news-breaking search trends, implications for online advertisers, and he will give Webcast participants opportunities to ask him their most burning search trend questions! Oh, and Bill will give away 10 copies of his latest book, “Click: What Millions of People Are Doing Online and Why It Matters,” to the best questions fielded during the SES Webcast.

Many advances in marketing on the Web are the result of spending by the profitable and competitive porn and gambling industries. In today’s SEM Crossfire column, “Porn and Gambling: Canaries in the SEM Coal Mine?,” Frank Watson and Chris Boggs explore recent lawsuits in both industries that might help us again, by pointing out some specific areas for marketers to keep an eye on.

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The first phone with Google’s new mobile platform Android was released last week on Tmobile. Unlike the iPhone, Android will be seen on more devices and more carriers in months and years to come.

But Sprint CEO Dan Hesse says Android isn’t quite ready to carry the Sprint name on a device - not yet anyway. He says that Sprint will carry an Android phone in the future, but the platform needs work.

It might be tempting to suggest that the struggling Sprint should hop on board. After all, Tmobile’s G1 pre-sold $1.5 million devices. But Sprint is smart to wait on a ready-for-prime-time device. It needs to sell solid products that garner their own word of mouth instead of simply hopping on a hype wagon.

One of the reasons Android might not be ready is because of a newly discovered security flaw. The flaw was found by former National Security Agency computer security specialist Charles Miller.

Miller has reported the flaw to Google, which says it is working with HTC and Tmobile to issue a fix to G1 customers.

New data released by Rubicon Consulting shows that online reviews are second only to word of mouth when it comes to influencing consumer purchasing decisions.

Here’s other key points from the survey:

• The Web is the #2 resource for customer support information, after user manuals. It ranks ahead of calling the manufacturer or asking a dealer.
• Website categories that get the most daily usage are search, social communities like MySpace and Facebook, general news websites like CNN.com and NYTimes.com, and online banking.
• The websites that Americans value most are (in order), Google, Yahoo, YouTube, Wikipedia, and Facebook. Although Yahoo’s financial challenges have generated a lot of press attention, it continues to have a very large and loyal following.
• Young people (age 22 and under) are much noisier online than their elders. They account for about half of all the content and comments posted online.
• Facebook appears to be ahead of MySpace in terms of number of users in the US, and perceived value of the site.
• Despite extensive publicity, the community sites SecondLife and Twitter reach only a few percent of US Internet users.
• Democrats are more active online than Republicans. Democrats are more likely to participate in online communities, and say they are more heavily influenced in their voting decisions by information they find online.

Harry Max, a principal at Rubicon Consulting said, “Many companies downplay the importance of online communities because only a few percent of all Internet users contribute to them heavily. What they don’t understand is that most other Internet users read those reviews and rely on them heavily when making purchase decisions. Taking good care of online communities can be a huge money-saver for companies trying to get more marketing impact from limited budgets.”

I disagree. I think a lot of companies are interested in online communities but aren’t always sure how to engage consumers with them. However, with the economy the way it is, many companies are likely to cut social media first, as we saw in data released just the other day.

The biggest key to making sure you get good online reviews is to have a solid product or service. So, while you’re making those efficiencies in order to survive the slow economic times, make sure your products don’t suffer. Better yet, create efficient products and services and just watch those positive reviews come in.

To get the ball rolling, you might try pitching a few bloggers - especially mom bloggers if you have a product or service related to them.

Related Reading:
How to Bury Negative Online Mentions of You - Intermediate Level Tactics
Constructive feedback on online reputation management
SEO for Brand Reputation Management
Pssst. People are Talking… About Your Business!

So far, the majority of marketing budgets are not facing changes or cuts due to the economy, according to survey results released by eMetrics.

60% of respondents said their marketing budgets haven’t changed.

After that, the news gets a little discouraging.

27.6% said their budgets are being affected negatively, while 6.9% answered very negatively.

Only 3.4% said their budgets were being affected positively and a miniscule 1.7% answered very positively.

Don’t stay bummed for too long. The economy seems to finally getting senior management on board with those ever important analytics.

80.4% of marketers say interest in web analytics from senior management in the past 6 months has increased. On that note, it might be a good time to start pitching landing page testing as well.

So what advertising campaigns are specifically being affected? Check out this chart:

Some of the channels are being outsourced:

You can view the full report here (pdf).

What are your thoughts on the economy and marketing budgets? Leave your thoughts in the comments.

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