Report: Google deal may raise Yahoo search prices
By Alisa Zykova, Wednesday 16 July 2008 at 21:48 :: General :: #1938 :: rss
Yahoo! announced a deal with Google in June, permitting Google’s sponsored ads to show up next to Yahoo! search results. The deal, which may bring between US$250 million to $450 million for Yahoo! in the first year of its implementation, might also cause turmoil amongst ad buyers. A new report by search engine expert SearchIgnite seems to offer little to calm ad buyers’ anxieties.
"The deal is clearly financially beneficial for both Yahoo! and Google; however, advertisers need to be aware of the potentially significant impact to their search marketing efforts. Most marketers will see their overall costs for search advertising across the Yahoo! network increase, and will need to adjust their search strategies accordingly," said Roger Barnette, SearchIgnite president, AdWeek reported Tuesday.
Yahoo! intends to make use of Google’s search technology to include ads alongside search results, after picking the search words out itself. The purpose is “to increase its ad performance for less popular, long-tail searches” according to Adweek.
The report predicted that if Yahoo! uses Google digital resources and prices of less common “tail” searches, it will “increase search costs along the board,” AdWeek reported.
According to the report, Yahoo!’s keyword ad prices may go up by about 22 percent, if the company decides to capitalise on profits from the keywords it shares with Google.
Ad buyers may be worried because Google may become a search ad monopoly of sorts if Yahoo! decides to give its search business to Google.
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