search advertising partnership
Over Before It Started: Google and Yahoo Search Ad Deal Canceled
Google is ending its search advertising partnership with Yahoo. It was never even implemented. Concerns over antitrust issues rose fast and furious since Google + Yahoo = an enormous chunk of the search ad market.
Groups of advertisers spurred on by Microsoft lobbied the Department of Justice to oppose the deal. But they might have just facilitated the search market going from 5 major engines to 4, providing less competition.
Yahoo is in dire straits and desperately needed this influx of cash. It’s looking more and more likely that their stock could drop (fairly or unfairly) to single digits, at which point Microsoft could get a great deal on a company they once offered $31 a share for.
Take that number 4 and reduce it to 3 if a Yahoo-AOL merger occurs before the (inevitable?) acquisition.
Both Google and Yahoo are saying that the cancellation of the deal won’t affect their commitment to search innovation.
Google and Yahoo Revise Ad Partnership in Hopes of Winning Over DOJ
Google and Yahoo have revised their search advertising partnership in the hopes of winning over the DOJ. Primarily, the deal has been reduced from 10 to 2 years and a cap has been placed that would restrict Yahoo to only being able to bring into 25% of their search advertising revenue from the deal with Google.
It’s unlikely that shortening the deal will qualm the fears of advertisers. Robert Liodice, president of the Association of National Advertisers, which opposes the deal, told the New York Times, “If a deal can’t survive long-term scrutiny, what’s the benefit of allowing it for the short term?”
Still, keeping Yahoo alive as the second place competitor in the search market is ultimately good for advertisers. As Mike Masnick over at TechDirt wrote, “We’re still waiting for a clear explanation of how this deal will actually negatively impact consumers, but some people still insist it will. For those who believe so, let’s ask a simple question: how is this any worse than Yahoo disappearing from the marketplace? Because if the company doesn’t do something soon that may be what we’re looking at.”
Rep. Barton Suspicious of Google/Yahoo Deal
It turns out that the concern over the Google/Yahoo search advertising partnership is bipartisan. Earlier this month, Senator Herb Kohl (D-Wisc) urged caution in a letter to Assistant Attorney General Thomas Barnett.
Now, Rep. Joe Barton (R-TX) has written a letter to Barnett expressing his concern. Barton’s beef is with what he feels is Yahoo’s inadequate response to questions regarding the deal.
Barton represents a district that includes Fort Worth as well as suburbs of Dallas. The area is home to many search advertisers. It’s no surprise that Barton is raising concern on their behalf.
Google and Yahoo have tried to assure both the DOJ and advertisers that prices will not go up as a result of the deal, but fears remain. Both companies have said that advertisers set the pricing through the bidding process, but when you’re thinking about bidding for a term on the top 2 search engines, it’s understandable to think that prices will go up – even if Google and Yahoo do not set them higher.
What remains is uncertainty, which is not exactly comforting in a volatile economy.
Google Learns to Navigate Washington the Hard Way
Google is finally starting to learn that the Schoolhouse Rock song, “I’m Just a Bill,” forgot to include the part about lobbying.
Google opened up a Washington, DC office a few years back to handle the minimal lobbying it was doing. But according to a story in the New York Times, Google has been learning the ways of Washington through the school of hard knocks.
And they may not have graduated in time to address the current regulatory concern over their search advertising partnership with Yahoo.
Perhaps Google is just a tad too used to being the big dog in Silicon Valley. But DC is a different culture. Every industry is represented there, from sugar growers to plastic surgeons to the nuanced niches in tech.
And despite an increasingly digital culture, face time is crucial in DC. The NYT article says Google is getting poor attendance marks for its presence at political events.
Meanwhile, Microsoft knows how the machine works, and they’ve been keeping it well oiled in order to influence groups to opposed the Google-Yahoo deal. Even the Latino Farmers and Ranchers have climbed on board the opposition bandwagon.
Microsoft is now suggesting that Google is losing the debate and resorting to calling out lobbying as the reason why instead of regulation.
Of course, when it comes to antitrust regulation, Microsoft calling anyone out is like the pot calling the kettle black.
Is Yahoo Being Undervalued by Wall Street?
Despite Yahoo’s decline in the search market as of late, some are beginning to cry foul, saying Wall Street is punishing YHOO just a little too much. Prices dipped below $11 a share this week, almost half the value when Microsoft made its acquisition offer for $31 per share.
A couple of points in defense of Yahoo:
- Its decline in search market share is slight. They’re still #2. They’re comparable to the Apple of the search world if you’re just looking at the numbers.
- The stock is being brought down by the greater market. Even Google’s stock is down to the mid-300s, despite beginning the year in the high 500s. But Google posted an increase in revenue and beat the pessimistic Street yesterday. Their stock is on the rise at this hour, while the Dow Jones is on the decline again.
- They have a bunch of strong properties, including Yahoo Sports, which had a stellar August thanks to the Olympics. They’re also number 1 in email.
A couple of points in defense of Wall Street:
- Jerry Yang is no Steve Jobs (or at least not anymore).
- The search advertising partnership with Google has been delayed while they attempt to work things out with a wary DOJ.
- The economy has everyone holding their wallets tight.
Jerry Yang and the gang need to refocus on the customer instead of executive bonuses, while Wall Street needs to understand that while advertising in general may decline, search advertising is an attractive option for advertisers looking to maximize budgets.
Oh, and in case you’re wondering, Microsoft remains a scorned lover.
A Bunch of Cute Little Updates to Google Properties (and the Algorithm)
Today, there are more updates to Google products than you can shake a stick at. So intead of writing a bunch of short, little posts, I have consolidated them into one for you, faithful SEW reader.
Both my awesome husband and my awesome 11 year old son have pointed out to me the new changes to iGoogle. I personally don’t use my iGoogle page all that much (Keepin’ it real [simple]), but I did browse over to it and found some cosmetic changes (The Foo Fighters theme was already there.)
Notice the tab on the left hand side. It includes links to the widgets on your iGoogle page. When you click on one of the links, it switches to a screen with that widget. Some take up the whole page. Others present a list of similar widgets as suggestions. Still others make use of Google reader to present a feed.
Moving on to other Google properties….
Webmaster Tools now testing a Message Center warning that alerts webmasters to possible vulnerabilities with their Content Management Systems (CMS).
Google TV ads has announced new partnerships with COREMedia Systems and Harris Corporation. The COREMedia partnership allows CoreDirect customers to view their Google TV ads right along with their CoreDirect data. The Harris Corp. one adds more inventory for Google TV advertisers.
AdWords has separated the metrics for Google and search partners such as Ask, AOL, etc. This is probably in preparation for the implementation of the Yahoo search advertising partnership.
Last but most important is the changes to the Google algorithm regarding Adobe Flash. Brian Ussery has a writeup about it on his extremely minimalistic-looking blog. Basically, he finds that indexing of Flash still isn’t ready for prime time. I know there may have been some hope with recent news of Adobe working with Google to provide better indexing, but we’re just not there yet, folks.
And that concludes the flurry of Google updates for Friday, October 17, 2008. Leave your thoughts, impressions, etc in the comments!
Google, Yahoo Trying to Work It Out with the DOJ
Google and Yahoo are attempting to avoid an antitrust lawsuit by working with Department of Justice on their search advertising partnership, according to the Wall Street Journal.
Details are vague, but the search engines are willing to put extra measures in place per negotiations with the DOJ in order to get the deal to go through.
Google and Yahoo have already delayed the implementation of the advertising deal, after going on offense in August and September about going through with the deal in October no matter what.
Related Reading:
Senator Kohl Wants Oversight of Google-Yahoo Deal
Yahoo Also Launches Site Defending Search Ad Deal with Google
Yahoo’s Sue Decker Weighs In on the Defense of the Search Ad Deal with Google
Google Launches Facts Site About Yahoo Search Ad Partnership
To Fear or Not to Fear: That is the Question (About the Google-Yahoo Ad Deal)
Now States are Investigating Yahoo-Google Deal
Just a few weeks after the US Department of Justice formally opened its investigation to the Yahoo-Google search advertising partnership. Now, about a dozen states are looking into the matter, according to the Washington Post.
Not at all surprising, Connecticut is one of those states. Earlier this year, a bill was introduced to the state’s General Assembly that sought to tighten the rules of data collection for companies who serve ads on sites they don’t own.
Connecticut Attorney General Richard Blumenthal told the Post, “We’re looking at it because we’re concerned about an excessive concentration of market power.” Connecticut has subpoenaed both Yahoo and Google for documents related to their new partnership.
Also issuing subpoenas is the state of Florida. Recently, the Sunshine State has been cracking down on online ad fraud. A spokeswoman for the Attorney General Bill McCollum told the Post, “We are reviewing the proposed transaction in conjunction with other state attorneys general, as well as the Department of Justice.”
Microsoft Secures Search Ad Partnership with Rodale’s Health Sites
Microsoft has announced a new search advertising partnership with Rodale’s roster of health sites. The agreement is exclusive and includes sites like MensHealth.com, WomensHealthmag.com, Prevention.com, RunnersWorld.com and Bicycling.com.
“Rodale is the authoritative source for trusted content in health, fitness and wellness around the world and on the Web, and we are pleased to provide our advertisers greater access to this valuable audience segment,” said Scott Howe, vice president of the Advertiser and Publisher Solutions Group at Microsoft. “The inclusion of Rodale in our lineup of syndicated advertising partners is a strong indicator that we’re continuing to gain significant traction with our advertising platform and further complements our vertical expertise in health, finance, travel, autos and entertainment.”
Related Reading:
Paid Search Advertising Drives Microsoft Bid for Yahoo
Microsoft Changing Trademark Policy For PPC Advertising
Microsoft Committed to Advertising Success
Digg Goes with Microsoft for Ads
Microsoft Invests $240 Million In Facebook
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