Changes in Paid Search

Yahoo’s current organic search results and paid search results will be replaced by Bing’s search results. Yahoo will no longer have to maintain its own organic search algorithm or paid search algorithm. The Yahoo-Microsoft deal will affect how search advertisers, search engine users and the top 3 search engines (Google, Yahoo and Bing).

• Bing’s search market share in the US will increase to 28% (Yahoo sites’ 19.6% plus Microsoft sites’ 8.4%). Google still has 65% of searches, but 28% will allow Bing to become Google’s closest search engine competitor.
• With Bing and Google getting a total of 93% US searches, most serious search advertisers will only need to cover Google Adwords and Microsoft Adcenter.
• The problematic Yahoo Search Marketing system will soon be shut down and Yahoo believes the deal is beneficial to PPC advertisers.
• Second tier PPC search engines will remain as second-tier and will not be affected.

Yahoo’s Failures in PPC

Yahoo entered paid search by acquiring the leading PPC platform Overture (at the time) in 2003. In early 2007, Yahoo launched the new PPC platform Yahoo Panama (YSM) to replace Overture. Yahoo’s PPC has since become less credible and less valuable, after a series of external and internal decisions.

• Microsoft MSN’s US portal was one of Yahoo’s paid search partners. In July 2006, MSN ended the partnership and started to display Adcenter’s search ads.
• Yahoo Search Marketing’s Ambassador Program, Yahoo’s official PPC certification, was closed in May 2008.
• Yahoo shut down one of the most popular free keyword research tools, Overture’s keyword suggestion tool, in June 2008.
• Yahoo PPC automatic account optimization was quietly rolled out which raised concerns and complaints from Yahoo Search Marketing advertisers.
• Search engine users will essentially be left with options of two distinct sets of search results (Google and Bing).

China Search Market

Yahoo’s exit in search will not affect China’s search market.

• Ever since Alibaba Group’s takeover of the Yahoo China’s operations, Yahoo China has not grown in search market share and is still at 5.6%.
• Alibaba Group has no serious plan to improve Yahoo as a search engine, but has merged Yahoo with Koubei.com, a Hangzhou-based life community site.

Baidu (61.6%) and Google (29.1%) remained as the top two search engines in China (in Q2 of 2009), according to Analysys.com. Baidu PPC and Google Adwords will still be the first two choices for search advertisers targeting the Chinese market.

The Global Big Picture of Search

The number of user searches increase year on year for the major search engines, but still not a single market has large enough scale to accommodate more than two major search engines’ co-existence. In both the US and China, the third major search engines’ volumes (Ask’s 3.6% and Yahoo China’s 5.6%) are far behind the second’s.

On the global level, with Yahoo fading away the new ranking for the top 3 search engines will be Google, Bing, and Baidu.

How other blogs talked about this Microsoft-Yahoo deal:

• It’s Official: Microsoft and Yahoo! Finally Strike Search Deal – Search Engine Watch
• Microsoft-Yahoo Search Deal Imminent: Analysts Weigh In Techcrunch
• It’s Official: Microsoft and Yahoo Announce Search Deal – Read Write Web

Senior Vice President, David Drummond wrote on Google’s official blog:

After four months of review, including discussions of various possible changes to the agreement, it’s clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn’t have been in the long-term interests of Google or our users, so we have decided to end the agreement.

As one of the advertisers on Yahoo, we received the following email from Yahoo US’s Executive Vice President, Hilary Schneider:

We wanted to reach out to you directly regarding Google’s decision, announced earlier today, to terminate the advertising services agreement that the companies announced in June. Yahoo! continues to believe in the benefits of the agreement, and is disappointed that Google has elected to withdraw from the agreement rather than defend it in court. Google notified Yahoo! of its refusal to move forward with implementation of the agreement following indication from the Department of Justice that it would seek to block it, despite Yahoo!’s proposed revisions to address the DOJ’s and advertisers’ concerns.

While disappointed by this turn of events, we are writing to you to reaffirm our commitment to working together to drive your advertising results, and to provide the continued leadership you expect. The fact is that this deal was incremental to Yahoo!’s product roadmap and does not change Yahoo!’s commitment to innovation and growth in search.

As you know, Yahoo! has long focused on how to improve the user, advertiser and publisher experience. We will continue to enable you to easily connect with the consumers you most want to reach, by creating a more open, efficient and effective marketplace for advertisers and publishers. We also plan to continue to provide the cutting-edge advances in products, platforms and services that the industry needs and expects, by leading the way in helping advertisers navigate the converging contextual and search ad markets. Finally, we remain committed to innovation in anticipating the needs of Yahoo!’s audiences–one of the largest and most engaged populations of consumers on the web–by creating the unique context that delivers results for brand advertisers online.

In short, even in the absence of a commercial agreement with Google, we intend to become an ever-stronger player in online advertising. Our certainty on this front comes from the progress we continue to make in many areas, not the least of which are the significant innovations we’re making in search. We continually optimize our algorithmic and sponsored search. In fact, in 2008 alone, we have developed and launched hundreds of improvements to our search engine, including index expansions and updates, ranking models and performance tuning. Each of these features is designed to improve search quality and deliver a more relevant search experience to our users.

Particularly in this economic climate, identifying and making rich and deep connections with your target audience is of the utmost importance. No company is better prepared to help you succeed in that quest than Yahoo!. In addition to being the largest aggregate publisher in the U.S., we are #1 or #2 across virtually every key category, including being #1 in the categories of News, Sports, Finance and Entertainment, and we’re putting our leadership to work for you every day.

By offering extensive reach to consumers, breakthrough advances in technology, simplifying inefficiencies in the advertising process, putting new and industry-recognized talent in place, and providing tailored solutions across our network to meet your needs, we are well prepared to provide you with the most significant return on your investment.

We are looking forward to continuing to work with you in building your business. Please don’t hesitate to reach out to me or anyone on our team with your questions, or to discuss your challenges. We’re open to a productive dialogue with you in the service of continuing our successful work together.

How other blogs talked about why Google pulled Yahoo ad deal:

• Google Pulls the Plug on Yahoo Advertising Deal
• Ending our agreement with Yahoo!

Yahoo CEO Jerry Yang said on the YCorp Blog:

I started dreaming about this day 18 months ago, when I laid out my vision for our board of directors on how Yahoo! could play a unique role in changing the face of online advertising… We listened to all of the pain points that our partners shared about the process of buying and selling ads. Would you believe it takes more than 30 manual operational steps to move from ad strategy concept to launching that ad? It involves faxes (!!) and sometimes weeks in proposal processing.

APT looks to change all that. It’s simple. It’s open. It’s fast (like minutes vs. days). It provides a new level of control. It offers cross-selling more easily than ever been before. It will provide large amounts of quality inventory. It will help advertisers customize and target their messages more precisely through advanced targeting. And it will drive results. All this from a single online application. No more cobbled together processes or impressions. No more wasted time.

At this stage, I believe the new platform will allow both search and display ad advertisers to manage their advertising campaigns more easily within a single platform. As up to today, launching a simple search advertising campaign on Yahoo Search Marketing has been a troublesome process.

Google has been leveraging effectively from tail keywords with its paid search platform Adwords, however this is one of the biggest problems of Yahoo Search Marketing. Yahoo Panama makes it difficult for advertisers to efficiently scale up their global campaigns, letting alone scaling up in the long tail. Yahoo requires advertisers to set up in such a way that each country has its own invoicing process. Also, without creating multiple accounts in different countries, launching a global campaign is impossible.

By showing Google’s ads on Yahoo’s unsold ad inventories which are essentially the “under-monetized” tail keywords, both Yahoo and Google will be benefited. Google will hopefully be able to further boost traffic volume for its own advertisers through Yahoo’s long tail, and Yahoo will leverage financially. The deal will not only allow Google ads from being displayed on Yahoo’s own properties, but also on certain selected partners of Yahoo.

I expect this partnership will not make much difference to the quality of Yahoo’s PPC traffic, and hopefully not much of its existing traffic will be absorbed by Google. Now there are still 2 interesting questions left for search engine advertisers and publishers:

• Will Yahoo be replacing more of its PPC ads with Google’s ads for inventories where both Google and Yahoo can leverage more?
• Will Yahoo be eventually replacing its own Panama platform with Google’s Adwords platform?

Now this time, the buzz is from Yahoo! Mail which will be providing unlimited free storage in May this year!

If you are interested in the history of Yahoo! Mail with how it went from the original 2 Megabyte of storage to unlimited, here is the official announcement.

• Yahoo! Sites: 23.9%
• Verizon SuperPages: 20.1%
• Google Sites: 12.5%
• Yellowpages.com: 12.0%
• Time Warner Network: 7.7%
• Local.com: 5.9%
• InfoSpace Network: 5.1%
• Dexonline.com: 4.1%

The results were recently released by comScore. According to comScore,

The study is the second in a two-part series that analyzes the growing consumer trend of researching local information online. This analysis revealed that 68 million U.S. Internet users performed an IYP search online in July. This represents a 46 percent increase versus year ago.

Related Information:

• Yahoo! Releasing Top 20 Misspelled Keywords

1. Rachel Ray (Rachael Ray)
2. Tatoos (Tattoos)
3. Scarlett Johanson (Scarlett Johansson)
4. Wierd Al Yankovic (Weird Al Yankovic)
5. Evanesence (Evanescence)
6. Soduku (Sudoku)
7. Barbara Streisand (Barbra Streisand)
8. Louis Vitton (Louis Vuitton)
9. Jamie Presley (Jaime Pressly)
10. Jimmy Buffet (Jimmy Buffett)
11. Brittany Spears (Britney Spears)
12. Brittney Spears (ibid)
13. Anna Nichole Smith (Anna Nicole Smith)
14. Eva Mendez (Eva Mendes)
15. Jessica Beil (Jessica Biel)
16. The Biggest Looser (The Biggest Loser)
17. Jennifer Anniston (Jennifer Aniston)
18. Marie Antionette (Marie Antoinette)
19. Mercedez Benz (Mercedes Benz)
20. Micheal Jordan (Michael Jordan)

I am not sure if many PPC and SEO marketers can be benefited from the misspelled keyword list above, though maybe some people will want to count how many celebrity names are in the list.

The other true one fact is that Yahoo! as a search engine has improved over the years alongside the likes of Google, MSN, and Ask. As an example, if you misspelled Louis Vitton, Yahoo! does remind you that you have misspelled it and provide you the correct web page as your first search result.

• In the auto industry, the majority of auto purchasers see search as the first place for information. Search helps auto purchasers to narrow the available options.
• It is more complicated in apparel as offline buyers use search for more than one reason. Apparel buyers use search to find a store, compare prices, find specialty items, and keep up-to-date on styles. For teen apparel buyers, search is used to effectively learn about brands.
• In VoIP services, many consumers use search for general learning about VoIP and brand differentiation.

To sum up, both SEO and PPC experts should always try to understand consumer intent in their sectors. In some sectors searchers mainly use search as a tool for research, while in other sectors searchers are ready for purchase.

The first sign of the escalated competitiveness between the two search giants was last year when MSN Adcenter was launched in France and Singapore as a beta. Adcenter is a PPC advertising interface that was invented and is very similar to Yahoo! Search Marketing and Google Adwords. MSN Adcenter provides features such as geo-targeting and day parting that Yahoo! Search Marketing currently does not have, but it is still a long way behind Google Adwords.

Yahoo! Search Marketing is expected to complete its upgrade by Q3 this year, and become comparable to Google Adwords. Currently many PPC experts believe that in terms of click-through rate, Google Adwords is still the best, though some believe that Yahoo! Search Marketing tends to have good conversion rates in some specific categories.

Yahoo! Slurp is the Yahoo! search spider that is crawling the web where Slurp is the name of the original Inktomi spider. This spider created a shared database which is used to power Yahoo! Search, AltaVista, AllTheWeb, and Inktomi powered partner sites. Yahoo! Search is powered from using the best breed of search results of AltaVista, AllTheWeb, and Inktomi.

Today Yahoo! is still the most visited website in the world, according to one of the web trend companies Alexa. Most Internet users see Yahoo! a web portal, unlike Google, a search focused company.