Finally Yahoo decided to cave in and has decided to partner with Google to display relevant alongside its search results in the US and Canada. This surely is the beginning of the end of the ambitious Panama project.
If you remember Yahoo had announced a similar deal a couple of months back that was more of a test to see the returns from the ads by Google. From what I’ve heard, Yahoo was extremely satisfied with the returns and that’s why this deal is happening today.
Yahoo has spent a lot on Panama, the advertising platform that was built to compete with Google Adwords. But somehow Google managed to stay on, and Yahoo has seen less ad dollars compared to Google on its search advertising front.
You can read the Google blog post about the deal, but here is the main gist of the deal.
The deal is non-exclusive. Yahoo will be able to run Google ads alongside Yahoo ads or other ad providers.
- The deal is expected to add $800 million a year in revenues and $250 million to $450 million in operating cash flow.
- The deal only applies to paid search and contextual ads, not to algorithmic search.
On a related note, Yahoo also has concluded all talks with Microsoft and decided to focus on its core business. I have no idea who’s going to benefit in this race of Internet domination that Microsoft, Yahoo and Google are vying for.
At the end of the day its Google who is playing the smart moves. Simply put this deal will start the decay of Yahoo Search, and who knows one day they might even outsource search to Google. Who wins? Google obviously.
As someone said, this deal is more like Ford signing a deal to have its cars built by Honda. By any means its an admission of failure, a failure by Yahoo to monetize its assets effectively and a complete failure in the search game.
I now wonder what does Microsoft get by buying a sinking Yahoo? Simply put Microsoft is a sinking ship too, and two sinking ships don’t make a cruise that is Google.
I have virtually have no interest in this deal, since this is the beginning of another round of internet domination by Google. But even otherwise I’d never want Yahoo to go into Microsoft’s hands. The big three are BIG only when they are left on their own, not when Yahoo becomes a mouse to Google or Microsoft.
On a slightly retarded note, I love the press release headline of Yahoo. ‘Yahoo! to Strengthen Competitive Position in Online Advertising Through Non-Exclusive Agreement With Google‘
Google’s press release is a better read though. Sound off your opinions of the deal in the comments.