Yahoo and Google Show Competitor Love with New Ad Deal

October 23, 2015

Digital Marketing ChannelAdvisor By ChannelAdvisor

Two of the largest search engines in the world are combining forces. Yahoo recently announced a three-year search advertising agreement with Google — shortly after reporting disappointing Q3 revenue.

The agreement is tit-for-tat, or should we say search advertisement for search query? Google will be providing Yahoo with retailers’ AdWords search advertisements on both desktop and mobile platforms, while Yahoo can select which search queries to send to Google — meaning, Yahoo will send some queries to Google and display search results on Yahoo that are powered by Google technology.

The Wall Street Journal reports that Google will pay Yahoo a percentage of the gross revenue generated from ads displayed on Yahoo. Yahoo, meanwhile, will pay Google fees for image search results or web algorithmic search results requests.

This Yahoo-Google partnership comes at an interesting time, considering the recent breakup between Yahoo and Microsoft (Bing) back in June. However, during Yahoo’s Q3 earnings, Yahoo CEO Marissa Mayer did allude to more changes coming to the company, noting that as Yahoo moves into 2016, it will be focusing on fewer products.

Under the Yahoo-Bing deal, 51% of Yahoo’s desktop search traffic has to carry Bing ads. This leaves 49% open for Google or Yahoo Gemini ads. Yahoo has more flexibility on mobile devices and on product ads, which aren’t subject to the 51% clause.

We’ll be keeping a close eye on how Yahoo shifts and progresses.

 

Blog post by Jordan Nowlin, social media and blog manager, ChannelAdvisor


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