Yahoo and Google Partner Up for Search

June 13th, 2008 at 12:00 am


Just hours after Yahoo announced that negotiations with Microsoft have totally collapsed , Yahoo pursues and finalizes the search deal they had with Google.

When talks between Yahoo and Microsoft broke down the first time , Yahoo went into an experimental arrangement with Google to test whether outsourcing their search business to Google would enhance their performance.  Apparently after two weeks of testing, Yahoo and Google had fun and were in talks on making the arrangement long term.

And so after Yahoo finally broke off dealing with Microsoft, they signed a pact with Google (like two lovers finally eloping, aww.. sweet).  Google made the announcement earlier today in their official blog post

Basically, Yahoo will be using the Google Adsense platform to sell ads.  they will both split the earnings.

Google has emphasized some key points on why they agreed to the arrangement.

  • Consumers will see more relevant ads when they are looking for information and browsing the web. And with interoperability between IM services, users will have easier access to even more of their contacts.
  • Publishers currently in the Yahoo! Publisher Network will benefit from Google’s advertising technology, potentially increasing the revenue they earn from their sites.
  • Advertisers will have new ways to reach their target customers online more efficiently.

Moreover they also reiterated what the deal would and would not do for consumers and the competition.

  • This is not a merger. Rather, we are merely providing access to our advertising technology to Yahoo! through our AdSense program.
  • This does not remove a competitor from the playing field. Yahoo! will remain in the business of search and content advertising, which gives the company a continued incentive to keep improving and innovating. Even during this agreement, Yahoo! can use our technology as much or as little as it chooses.

  • This does not prevent Yahoo! from making similar arrangements with others. This arrangement is not exclusive, meaning that Yahoo! could enter into similar arrangements with other companies.
  • This does not increase Google’s share of search traffic. Yahoo! will continue to run its own search engine and advertising programs, and the agreement will not increase Google’s share of search traffic.
  • This does not let Google raise prices for advertisers. Google does not set the prices manually for ads; rather, advertisers themselves determine prices through an ongoing competitive auction. We have found over years of research that an auction is by far the most efficient way to price search advertising and have no intention of changing that.

So there, Yahoo and Google are now moved in together and are dating.