Google and Yahoo…Together Again and It Feels So Good

October 29, 2015

By October 29, 2015insights
google and yahoo partnership

The combination of having Google and Yahoo team up together again for search engine results seems like it could be a winner. Google and Yahoo once had a joint search program.

That was back in 2000 a few short years after Google launched. However, as Google grew Yahoo decided it was time to create their own system.

Back in 2008 they looked to get back together. The only problem was that US government turned down the deal, because they were afraid of a monopoly. Yahoo turned to Bing, and Google continued to gobble up the search engine market.

Fast forward to 2015 and we are singing a familiar tune again. Let’s see how this works this time around, as well as the benefits to all involved.

Understanding the agreement.

Yahoo announced the deal in their quarterly statement. They are not abandoning Bing, but have the ability to work with Google on the other 49% of ads that do not go directly through Bing’s ad engine.

Furthermore, according to Search Engine Land this deal has huge mobile potential. That is because Yahoo only has an agreement with Bing on desktop ads.

Back in 2008, when the contract was signed mobile ads were not even on the horizon. Now with mobile searches making up over half of all searches around the world this has some huge potential.

The EU equation

While the US DOJ might block the deal like they did in 2008, the real stumbling block to this deal might be the EU. While the agreement specifically excludes EU, the trans-governing body has been waging antitrust legislation on Google for the past year.

The problem is that EU might be able to block the deal even though search deal does not include any of their member countries. While this might not be right for them to decide upon a deal that does not even happen in their own territory, it is a legitimate concern.

India is also considering action. Unlike the EU, they are one of the countries that is part of the deal.

Both sides have a drop out clause if the government regulations become too onerous on this deal.

That being said, the US DOJ might approve the deal. Last time they rejected the Google-Yahoo deal, Yahoo had to turn to Bing. Ever since their search engine share has gone down. Now Bing has crossed 20% of all searches. Yahoo is hovering around 12%. Google remains at 64.5%.

Why does this partnership matter?

The biggest question advertisers and publishers need to know is why does this partnership even matter?

The truth is that Google and Yahoo together brings three specific benefits to everyone involved.

  1. More paid traffic– While Google does provide the vast majority of searches around the world, Yahoo still has a sizeable chunk. By having ads go through Google and Yahoo it allows advertisers the ability to market themselves across multiple platforms.

That in turn can lead to additional traffic. Since one of the main reasons people advertise is for additional traffic to their website or store, this is a big deal.

  1. Targeting– Having more people to talk is not only good for more traffic, but more targeted traffic. Random people seeing your ad is useless unless they need what you are selling.

Now, advertisers have the ability to provide more relevant ads to more prospective customers.

That is one of the reasons why Facebook ads have taken off over the past few years. With over 1.4 Billion people using the social network, you can find a cohort group for almost any niche.

The same is true with Google, and doubly so when you combine Google with Yahoo.

  1. Lower Cost– Google ads are based on a bidding system. The more searches, the more ads can be spread out across multiple advertisers at lower costs.

For example, let’s say you have 10 advertisers paying for the keyword “dog food.” If currently, there are 10,000 searches per month, then based on studies 29.67% of those searches clicks go to sponsored ads

For simplicity sake, let’s say that is 3,000 clicks.

If Yahoo gets 12% of the global search traffic, then maybe they have 360 paid clicks (12% of 3000)

Assuming that the average PPC is $1 and that all 10 advertisers have a $300 budget, then adding 36 more clicks per advertiser reduces their CPC to $.89. That is an 11% decrease in costs compared to just advertising on Google alone.

If you are running a campaign with multiple keywords this has a lot of exponential potential.

Final Thoughts

With Google and Yahoo coming together, we are seeing some new shifts in how search engines operate. Now, Yahoo is almost entirely dependent on Bing and Google for revenue generation.

However, they also are helping advertisers increase their reach at the same time. This could indicate a huge shift in fortunes for everyone involved in the deal.

If you are looking to benefit from the new Google-Yahoo deal, feel free to contact us with any questions you might have?

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