In the battle for internet search dominance, powerful companies are making strategic partnerships in hopes of gaining market share. In 2009, Microsoft made what it thought was a windfall of a deal with Yahoo. Since the Microsoft consistently comes in last place in the search engine space with Yahoo and Google leaps ahead – a partnership with Yahoo and Bing would help their numbers. The agreement was that Yahoo would run the then “new” Microsoft’s Bing ads for desktop searches. In return, Microsoft would help Yahoo financially (which it did) putting Yahoo back in business when it was on the brink of extinction.
Now Yahoo is taking the upper hand and the agreement has been renewed. SearchEngineLand says the agreement now stipulates that Yahoo has to post 51% of Bing ads from desktop searches – leaving 49-percent to Yahoo’s discretion.
So what is the story with the other 49-percent? Yahoo made it clear to Microsoft that it wanted the right to go to any third party and basically do what it wishes to do – without Microsoft interference. Wish granted. Yahoo is partnering with search giant Google in a three year deal that expires on December 31, 2018.
According to the services agreement, “Google will provide Yahoo with search advertisements through Google’s AdSense for Search service (“AFS”), web algorithmic search services through Google’s Websearch Service.”
Also under the Services Agreement, “Yahoo has discretion to select which search queries to send to Google and is not obligated to send any minimum number of search queries.”
According to experts, Google will pay Yahoo a percentage of the gross revenues from AFS ad displayed on Yahoo sites or affiliate sites. The amount of the percentage Google must pay will depend if it is a desktop or mobile device doing the search.
So what is the deal with Yahoo and mobile? Last year Yahoo launched it mobile platform, Gemini where advertisers can purchase both mobile and native ads to run on Yahoo properties. MarketLand speculates that Yahoo might use this for Bing as well.
Google will pay Yahoo a percentage of the gross revenues from AFS ads displayed on Yahoo Properties or Affiliate Sites. The percentage will vary depending on whether the ads are “displayed on U.S. desktop sites, non-U.S. desktop sites or on the tablet or mobile phone versions of the Yahoo Properties or its Affiliate Sites, “notes SearchEngineLand. Yahoo will pay Google fees for requests for image search results or web algorithmic search results.
Finally, Google has taken steps to protect itself. MarketLand says that “Yahoo is obligated to pay Google if it uses its editorial (“algorithmic”) search results for Web listings or images.”
The decision by Yahoo to embrace Google for advertising represents a remarkable turnaround for Yahoo which had once held a dominant position in search. It further demonstrates a recognition and admission of Google’s technological and algorithmic advantages.
The implication for SEO companies and online marketing companies seeking to own Page 1 search results is that optimization for Google is more important than ever and although Yahoo and Bing are still relevant, the foreseeable future belongs to Google.