Hey folks, welcome to Part II of the Yahoo!-Google deal coverage. My last article took a look at Yahoo!s press release detailing the event; this one will focus on Google’s blog post coverage of the deal.
First for a quick recap on the situation: after a pseudo-courtship which lasted the better half of this year, Yahoo! spurned Microsoft’s $40-something billion bid for acquisition and just last Thursday, officially signed a paid search contract with top search company, Google. Many sources and analysts believe Microsoft was looking for a bond with Yahoo! so that the two could tag-team Google. Google has long been the toughest competition in the search industry as well as in online advertising. But rather than join forces with Microsoft, Yahoo! chose instead to sleep in the lion’s den… well, at least in Microsoft’s eyes.
In my opinion, Google’s blog post was sprinkled with negative connotation. That’s not to say it had a negative outlook on the deal – not in the least. But, for example, while Yahoo! expressed its ambitions and enthusiasm about the recent event, Google included, among other details, a list of “what this agreement is not,” almost like a self-conscious disclaimer. Here are the main points taken from Google’s post:
- This is not a merger
- This does not remove a competitor from the playing field
- This does not prevent Yahoo! from making similar arrangements with others
- This does not increase Google's share of search traffic
- This does not let Google raise prices for advertisers
Okay, so now we have that out of the way, let’s talk about what the deal is in Google’s eyes. Like Yahoo!, the top search company stressed the fact that both parties invested in a “non-exclusive advertising agreement,” meaning that both Yahoo! and Google are free to affiliate with other companies and flirt with the idea of other deals and collaborations.
Google stated (in an almost patronizing manner) that it will begin to give Yahoo! access to its popular advertising program, AdSense, for both search and content advertising programs. As Yahoo! indicated in its press release, and Google likewise reiterated, this access is only available to Yahoo!s U.S. and Canadian web properties.
“We are proud of the advertising technologies we have built,” Google commented. The ongoing success of AdSense coupled with that of AdWords has led Google to the top of the online advertising game.
Confident in the similar, pre-existing partnerships with companies such as AOL and Ask.com, Google projected a hopeful future with Yahoo!: “We work closely with all of our partners to ensure that our partnership drives their long term success.”
Google maintained that another goal of the deal is to “enable interoperability between… respective instant messaging services.” This means that users stand to personally benefit from a more streamlined connection between contacts across different messaging platforms. Like Yahoo!, Google maintains that publishers and advertisers also can expect to benefit from the deal.
Perhaps the issue Google stressed most repeatedly was that of competition. Yes, Google reiterated, rephrased and restated that this deal will be “good for competition.” So just in case you were worried this deal would eliminate any future soap-opera drama as we’ve seen with Microsoft and Yahoo!, rest assured: “Google and Yahoo will continue to be vigorous competitors help fuel innovation that is good for users.”
Personally, I’m excited to see how this deal unfolds over the next twelve months. Yahoo! is looking to seriously stimulate its operating cash flow, and Google, well Google seems satisfied just to share its success in the online advertising market. Sure there are no ulterior motives? I guess we’ll just have to wait and see. In the mean time, congratulations to Yahoo! and Google. May your mutual endeavors be prosperous and profitable.