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Yahoo just announced they will be partnering with WPP to provide access to their advertising inventory to the clients and agencies associated with WPP. The agreement involves the use of WPP’s recent acquisition, 24/7 Real Media.

The press release (below) suggests Yahoo will give direct access to available inventory to the clients and agencies partnered with WPP.

The real question is if the inventory will be strategically grouped remanent traffic or direct access to all traffic in some type of bidding mechanism.

Beyond that it also seems Yahoo is trying to develop a hands off method for monetizing their traffic. First working on the change over to Google’s paid search and now this partnership with WPP to sell their other media…..

The other view - which may be more accurate now before everyone just starts using the third party vendors - is that Yahoo is trying to maximize all possible ways to sell their traffic in all its forms.

Let’s see how this impacts stock prices tomorrow.

Read the press release after the jump:

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Microhoo bid raised aloft; Google-Yahoo Kool-Aid quaffed. “No Mas” cried Ballmer’s Microsoft.

Yahoo drank the Google paid search Kool-Aid to fight off Microsoft, leading the Redmond giant to retract its higher bid to acquire the Sunnyvale search engine. Microsoft reportedly offered $33 a share, and Yahoo held fast at $37 a share. That was too rich for Steve Ballmer’s blood. The prospect of Yahoo outsourcing its paid search to Google was also too much for Ballmer to stomach.

So Microsoft walked. In a letter to Jerry Yang (full text below), Steve Ballmer cited Yahoo’s intention to outsource search as the primary reason he decided to scotch the deal.

Of course that doesn’t mean enraged Yahoo! shareholders won’t sue Yahoo.

Ballmer wrote, “I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.”

Here’s why, according to Microsoft’s business logic:

Advertisers would use Google rather than Yahoo! Panama to manage paid search, fragmenting not only PPC but display advertising and the Yahoo! advertising ecosystem.
Yahoo then wouldn’t be able to retain talented engineers working on advertising systems - engineers whom Ballmer considers a key aspect of Yahoo’s attractiveness.

The decision would also create a morass of regulatory and legal problems that no acquirer - especially Microsoft - would want to slog through. Ballmer believes search market share of the combined Yahooo-Google deal would reduce competition and advertiser choice.

Ballmer took the argument one step further, stating the deal would “effectively enable Google to set the prices for key search terms on both their and (Yahoo!) search platforms and, in the process, raise prices charged to advertisers on Yahoo.

While it would be hard to prove a keyword-auction would enable Google or any search engine to “set prices,” the deal would increase keyword prices based on Google’s ability to monetize inventory more efficiently.

Yahoo responded by promising (again) to maximize shareholder value and pursue strategic opportunities. Yahoo still maintains Microsoft undervalued the company.

Yahoo! banged the drum (again) about:

“– a refined strategic focus to drive enhanced volume and yield;

– reorganized to focus its efforts on its most promising products and services;

– invested in innovations designed to revolutionize display advertising and facilitate closing the competitive gap in search; and

– enhanced expense and resource management to support improved profitability.”

As Jerry Seinfeld might have said, “Yadda, Yadda, Yadda, Yahoo.”

Be prepared Monday for Yahoo shares to plummet back to earth. (Full text of Steve Ballmer’s statement after the jump.)

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According to the UK Search Engine Marketing Report 2008, released today by E-consultancy in association with Search Engine Marketing agency Neutralize (*\*), the industry is thriving in the UK with 63% of companies planning to increase their paid search (PPC) budget and 61% planning to increase their search engine optimization (SEO) budget.

In a press release, Lucy Cokes, the Managing Director of Neutralize (*\*), said, “It appears evident that search engine marketing is now cemented in the minds and therefore budgets of UK marketers. It is fantastic to see a greater understanding of the benefits of a well managed search marketing campaign and budgets being increased accordingly across both paid and organic search.”

Now in its second year, the UK Search Engine Marketing Report is based on the results of a survey completed earlier in the year by more than 1,000 respondents from both agencies and companies with first-hand experience of search engine marketing.

One of the key trends found in the report is this one: Since 2007, the proportion of companies conducting PPC and SEO exclusively inhouse has declined. Correspondingly, the proportion of respondents using an agency for both disciplines has gone up.

For more information, go to http://www.neutralize.com/media-centre/research-reports.

For the first time ever Google will host a worldwide live chat, where everyone will have a chance to hear and see Google Webmaster Central answer your questions.

If you own a blog, a Web site, or just want to move your company into the 21st century, do not miss this call.

Here are the details.

WHEN: Friday, March 28, 9am PDT / noon EDT / 16:00 GMT

Google will pay for the call. It’s free.

No strings attached.

The only 4 things you need to join the Google WebEx chat:

1. Phone
2. “Sufficiently-modern” Web browser
3. Internet connection
4. Search Engine Watch Membership

(Okay - just kidding (Google) about #4 - but a Search Engine Watch membership will help you prepare to ask Google the toughest search engine optimization (SEO) and paid search (PPC) questions).

Seriously - all you need is a phone, browser and Internet connection.

The call will be hosted by Google Search Evangelist and SES London speaker, Adam Lasnik, the heir-apparent to Google’s one-and-only Matt Cutts.

We know this isn’t an early April Fool’s Joke from Google because it’s signed off by Adam himself - and we quote:

“Talkatively yours,
Adam and the English Webmaster Help Guides”

We love the Google English Webmaster Help Guides. They have such cool accents. (Maybe Google will let the American Webmaster Help Guides answer a few questions too.)

Stay tuned for more on this historic Google event. All the techo-geek requirements for the WebEx chat? After the jump.

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There are countless reports that paid search is on the rise and is projected to continue trending upwards. But what are the driving forces behind the dramatic increases? A new paper by OneUpWeb examined that very question and came up with a resounding answer: It’s all about measurability.

Paid search offers unprecedented ability to measure, and the nature of the platform enables companies to quickly adjust campaigns according to analytical data or market conditions. Additionally, upfront costs are low because PPC ads are so darn cheap to create.

“We found, among all of our clients, that paid search improves lead generation and customer traffic. It increases conversion rates and suggested sales, and even improves brand recognition,” said OneUpWeb’s CEO Lisa Wehr. “Paid search is a win-win proposition.”

According to the paper, paid search accounts for more than three times the dollar revenue of classified ads, the nearest online marketing format. In 2007, paid search claimed 48 percent of the total U.S. online ad spend. In 2006, paid search grew 32.2 percent, while traditional media grew just .5 percent.

Managing PPC campaigns can be tricky. Last week, Marty Weintraub examined how to conduct PPC triage on a dying AdWords account. One of his conclusions was to integrate with natural search strategies, something OneUpWeb also found.

“When integrated with a natural search engine optimization (SEO) campaign, and overall marketing plan, it will return more for every dollar spent,” said Wehr.

What do you get when you mix ½ cup of paid search with ¼ cup of blogs, ¼ cup of videos and a dash of user profiles? The new adCenterCommunity.com is fresh out of the oven and it is a new PPC cake with Social Media icing.

adCenter has created one home for marketers, developers and analytics users. Not only will customers participate in communication with adCenter staff, but they will now have the ability to mingle with other adCenter customers as well. The new forums will help facilitate discussions about all things adCenter, from the advertising platform to the API.

“In order to contribute to our credo of delivering world class service, we have been working diligently to deliver an online experience that enables our advertisers through a variety of interactive communication channels,” wrote the adCenter team in an email announcing the new site.

Priceline CMO Brett Kellner joined us this week at Google’s New York headquarters (via conference call) to chat about travel trends in vertical search, the robust health of paid search (PPC) campaigns, and integrating online and offline advertising campaigns.

Last year I predicted 2008 would the year CMOs “get search.”

Brett, who leads one of the world’s most successful online pureplays, “got search” years ago. His leadership in vertical search is one of the reasons why so many of his peers have started to see the value of search-driven branding and direct marketing campaigns.

While many CMOs are only starting to ask their VP or director of marketing how search works, Priceline has already started testing Google audio ads and Google TV ads. The early results? All good.

Brett didn’t try to sell us anything at Google. He didn’t even mention the upcoming launch of Priceline’s new vertical search innovation: Inside Track. So when HotelMarketing.com broke the news about Priceline’s Inside Track “search agent” we thought Brett and William Shatner deserve a plug.

Priceline has launched Inside Track, a new tool that allows users to create a personalized airline ticket “scout.” You can see the top 50 biggest savings routes for Priceline’s Name Your Own Price.

The tool also provides analysis of best days to travel as well as notifications of increases in decreases in airline prices in a given city. This will allow users to act on price changes as they occur instead of being tied to submitted travel terms.

SEW Blogger Nathania Johnson visited Inside Track and found it not unlike a financial services Web site with stock tickers (with the exception of William Shatner greeting Nathania upon arrival).

Clicking on a city pulls up a list of destinations served by that city. Next to it are up and down arrows showing whether prices to that location are rising or falling and by how much. Very cool dashboard that shows price changes and trends by top city pair.

Here’s Brett’s official statement: “With Inside Track, priceline.com delivers the kind of comprehensive market-wide price trend functionality consumers have come to expect from Web 2.0 travel applications, plus the savings that are unique to priceline.com due to our elimination of booking fees on published fares and our Name Your Own Price airline ticketing service.”

For the business traveler with flexibility, vertical travel search engines now provide ultimate transparency into the yield management systems of airlines.

We really do set our own prices. Online travel is a 24/7 real-time auction - and the forerunner of Google’s paid search algorithm and Yahoo/Overture’s innovative keyword auction.

The launch of Priceline’s Inside Track comes on the heels of an announcement by Virgin founder Sir Richard Branson of Virgin Charter, a vertical search engine that is targeted towards high-end corporate and last-minute airline customers.

I interviewed Dr. Ralph Wilson, the Founder and Editor-in-Chief of Web Marketing Today, at SES London last month.

In the video interview, which is now posted on YouTube, Dr. Wilson recaps his “Introduction to Search Marketing” session. His introduction gave attendees the basics of paid and organic marketing online, starting the conference off by getting everyone on the same page.

Dr. Wilson also discusses his SES London session on paid search, giving special attention to the direct marketing-based landing page strategies in order to increase conversion rates, and dropping a few pointers on A/B testing for landing page optimization.

Dr. Ralph Wilson, Web Marketing Today, at SES London 2008

Dr. Ralph F. Wilson is widely recognized as one of the top international authorities in the area of Internet marketing. Business Week called his popular WilsonWeb.com website “bar none the best e-commerce resource out there.” Business 2.0 profiled him as one of the savvy dot-com survivors. The New York Times named Dr. Wilson “among the best-known Internet marketing publishers and consultants who preach the responsible use of e-mail for marketing.”

He’s the founder and editor-in-chief of Web Marketing Today, the grandfather of the Internet marketing e-zines, published continuously since 1995. Currently it is sent to over 107,000 confirmed opt-in subscribers. His Web Marketing Today Premium Edition is considered one of the top sources in the industry for in-depth content. He is a winner of the Tenagra Award for Internet Marketing Excellence and the author of hundreds of articles and numerous books, including Planning Your Internet Marketing Strategy (John Wiley & Sons, 2002), The E-Mail Marketing Handbook (Second Edition, 2005), and The Shopping Cart Report (Second Edition, 2004).

Check out the video interview on the SES Conference Expo channel on YouTube.

How does your PPC traffic compare to natural search traffic and direct navigation?

New York Times reporter Alex Mindlin reveals The Best Kind of Traffic for Web Sites.

Mindlin highlights a study by Engine Ready, a San Diego-based search marketing software firm, that analyzed 18.7 million visits over two years to 500 or so Engine Ready client Web sites.

The New York Times article reports that type-in traffic was the highest converting and “most valuable” traffic. Paid search (PPC) listings outperformed organic search (naturally). Paid search ads prequalify traffic with brand and direct response ad copy.

Visitors who clicked on paid search (PPC) ads were 17 percent more likely to buy. Plus, paid search (PPC) average order value was about 18 percent higher.

Type-in traffic and bookmarked traffic performed best with a 3.3 percent conversion rate.

That’s not news to our readers or search marketing industry analysts. But if you want to learn how your PPC ads can perform better than others, Jason Miller, CTO, Engine Ready Software, will be featured on a Search Engine Strategies panel on Monday morning March 17.http://www.searchenginestrategies.com/newyork/agenda.html

Chris Boggs, Search Engine Watch Expert and Manager, Search Engine Optimization, eMergent, will moderate the panel and I’m sure he’ll have some great questions about the Engine Ready study as well.

ComScore did what Yahoo, Microsoft, Facebook, and Digg only dreamed of.

ComScore killed the search engine star.

ComScore data on Google paid clicks rocked the world this week. The proprietary comScore qSearch report was analyzed to death by Wall St. analysts and media pundits. Data: summarized and judged; Google, convicted, flogged and sentenced to an early demise.

It wasn’t hit and run, though: comScore’s SVP of Media and Search, James Lamberti, and CEO and Co-Founder Dr. Magid Abraham delve deep into the data to correct the rush to judgment in the marketplace. It’s a must-read. Great analysis; surprisingly lifeless title: “Why Google’s surprising paid click data are less surprising.”

It should’ve been “Data doesn’t kill Google, people do.”

QSearch showed a 7 percent decline in January ‘08 vs. December ‘07. Paid click annual growth? Flat for Google.

Month-over-month the number of paid clicks per search on Google dropped by 8 percent (December ‘07 to January ‘08). Consumers clicking less on search ads? Maybe. A weaker buying appetite?

Google’s share price took a hit and rebounded. Reports of Google’s early demise? Greatly exaggerated. That doesn’t mean the momentum-driven Google shares won’t take a hit if Google fails to impress the Street this quarter.

Wall St. analysts - looking for clues where Google gives no guidance - had accomplices: mainstream media and bloggers hoping for a Google stumble.

No one wants to miss the Hindenburg. The only problem? The Hindenburg Crashes Nightly when Google news goes viral.

The Google backlash reared its ugly head and this time it wasn’t just Valleywag.

LendingTree whose multimillion dollar paid search campaigns are managed by search marketing firm Efficient Frontier, made public its new online marketing strategy: cutting back on PPC or paid search.

LendingTree spokesperson Allison Vail was quoted in CNET News.com by Stefanie Olsen.

“With the Fed changes in January, we were driving natural traffic. It’s smarter for us,” said Vail.

Our readers know it’s always smart to optimize for natural search. I’m not sure anecdotal evidence from a financial services pure play in the throes of a global subprime mortgage crisis proves paid search revenues are declining.

Statistics from search marketing firms, though, would lend credence to the argument.

For average CPC (Cost Per Click) by industry vertical (Financial Services, Mortgage, Credit, Auto), click here.

Efficient Frontier Chairman Ellen Siminoff, chairman told CNET that paid search advertising spendi in financial services has typically risen between 30 percent and 50 percent annually.

So far this year it’s either flat or down for some companies. credit and mortgage advertisers raised their spending by 24 percent, but this year, their spending has risen only 3 percent year over year, according to Efficient Frontier data.

Coming soon: Efficient Frontier / Search Engine Watch Average CPC data for February.

Be the first investment banker or hedge fund manager on your block to see the stats.