Microsoft Yahoo Partnership – Part 1 of 3

July 29, 2009

It’s getting
hard to keep up with all of the changes going on in the world of
eCommerce!  If you’re an avid reader of all of the ChannelAdvisor eCommerce blogs you’ve read Scot
Wingo’s highly informative posts on all of the eBay changes at our eBay Strategies blog.  Then,
Mark Vandegrift and his team of Comparison Shopping/ feed management
experts noticed a huge drop in Google Product Search traffic which was covered
in detail in a Google
Product Search
Webinar (also on our CSE
Strategies
blog).  Then Scot also gave his take on the recent Amazon
acquisition of Zappos
over at our Amazon
Strategies
blog – and now it’s finally our turn to report on something
exciting!

This
morning, Microsoft and Yahoo announced a 10-year Search partnership that states
that MSN/Bing will provide the search results for Yahoo Paid and Natural
listings. The deal should officially close some time in early 2010 and the
migration from Panama to adcentre should take about a year.  This change
in the marketplace will directly affect Retailers who advertise on Paid Search.

At ChannelAdvisor, we know how important
these changes are so we are launching a 3 part series to cover everything
Retailers need to know about this and what actions you will need to take.
This first of this series that we will cover the important details you need to
know about this partnership.

Platform
Consolidation

As
previously stated, this partnership will eventually phase out Yahoo’s Panama
platform and all campaign management will be through Microsoft’s
adcentre. 

Improved
Ad Relevancy on Yahoo

Our data
shows that Yahoo’s CTR is less than half of MSN/Bing (2009 YtD- 1.36% vs.
2.84%).  This means that Yahoo is not effectively serving the same quality
of ads to users conducting a search that MSN/Bing is currently.  Since
MSN/Bing will now be driving all Paid Search results for Yahoo, we expect the
CTR on Yahoo Impressions to increase pretty substantially.

Improved
Conversion Rates

Our data
also shows that Conversion Rate on MSN/Bing is roughly 18% higher than that of
Yahoo.  We also expect that Bing powered search results on Yahoo will help
improve this metric as well.

Paid
Inclusion

For those
Retailers currently using Yahoo Paid Inclusion, it was unclear as to the status
of the program.  However, since YPI is a form of Natural Search on Yahoo,
we expect that this program will be phased out since Bing will now be powering
the Natural Search results on Yahoo.

As you can
see there are several different aspects of this partnership that affect
Retailers.  We view this as an overall positive move for Retailers as it
will likely spur a period of innovation from both Google and Microsoft that
should ultimately benefit the advertisers.  It will also allow 3rd party
software providers, like ChannelAdvisor
to spend less time updating to API specifications and more time improving our
product.

Stay tuned
for the second part of the series which will be posted to this blog tomorrow.