On June 12, 2008, Google and Yahoo announced a non-exclusive advertising agreement between the two search giants. As part of the partnership, Google will provide Yahoo with technology and access to their AdSense search and content networks, similar to other agreements that it has with other search engines such as AOL and Ask.com.

When the partnership officially goes into effect in the next 3-6 months, pending federal approval, Google text ads will begin to appear on Yahoo search engine result pages and sites within Yahoo’s content network. Given Google’s focus on relevance to drive consumers to the content that they have expressed interest in, it is highly likely that Google’s technology will be used to help Yahoo provide more relevant content to its users. 

Yahoo has not determined what criteria it will use or how often Google text ads will appear for Yahoo search results. The criteria may include specific types of searches such as long-tail keywords or on keywords specific to various industries such as technology, automotive etc. 

For example, it is likely that advertisers buying more long-tailed and specific search results such as “42 inch plasma TV” will be added to Yahoo search results from Google and Yahoo will not outsource more general search strings such as “plasma TV” to Google.  Based on the criteria, advertisers using Google and Yahoo may need to consider changing their overall search strategy.

The partnership stems from a test trial that Google and Yahoo ran earlier this year to display Google text ads on Yahoo results. The test yielded positive results with Yahoo able to drive significantly more revenue by adding more paid results to their pay-per-click search. This test was particularly attractive to Yahoo shareholders as their stock price continues to plummet.  Some believe adding the Google results could generate as much as $250 million in added revenue for Yahoo and pave the way for a long-term agreement.

The partnership further demonstrates the need for search engines to serve relevant content to its users and provide a better search experience. Google’s technology and ability to provide more specific and tailored paid results in Yahoo will allow Yahoo to serve more relevant content to its users based on their search.

Search engine marketers and advertisers should continue to have a strong presence on both Google and Yahoo, but should evaluate their search strategies and budgets once Yahoo reveals its criteria.

By: Michael Lamontagne, Empower MediaMarketing Digital Analytics and Search Strategist