Sunnyvale, California -- Struggling to re-establish its popularity among the masses, Yahoo! Inc., the biggest U.S. Web portal, today announced a non-exclusive deal with Google that will see advertisements from the search giant appear on its new partner's web properties for users around the world as it seeks to boost sales from the content on its pages.
Ahoy! The world of online advertising is in a tizzy... Yahoo confirmed that it has formed a new partnership with Google, specifically discussing contextual advertising, and in this case display contextual advertising.
Yahoo welcomed Google's Adsense and AdMob networks to both its own properties, and “certain co-branded sites.” The ads will appear on Yahoo's sites for finance, news, sports and autos, Sara Gorman, a spokeswoman for the company, said in an e-mail.
As a matter of fact, this basically interprets to targeted advertising in which online ads displayed on Yahoo's digital properties better relate to what the user is looking at currently as well as past search and content patterns.
The company now spearheaded by Yahoo Chief Executive Officer Marissa Mayer plans to get more users engagement on a dozen of its top sites, she said during a call with analysts last month. The partnership with Google, her former employer, could help Yahoo boost revenue from those pages, said Mark Mahaney, managing director at RBC Capital Markets in San Francisco.
“I assume they would not be doing this if they did not think they can better monetize their traffic,” Mahaney, who rates Yahoo shares outperform, said in an interview. “There should be a near-term positive.”
Additionally, the alliance could be good for both companies, providing Google with additional real estate on which to run its ads and netting Yahoo more ads that it can use to fill its many Web properties, which include Yahoo Sports and Yahoo News.
The deal comes seven months after Mayer, formerly one of Google's top executives, took over the CEO job at Yahoo. Yahoo emphatically said that while this is a global deal, it is a “non-exclusive” agreement too. That means the company could be inking similar deals in the future.
Surprisingly, it is not unusual for competing search engines to forge alliances. However, there was no mention of Yahoo's broad search and advertising partnership with Microsoft, though that deal has not paid off for Yahoo as well as it had hoped.
Yahoo did not disclosed a ton of additional details, but here is a snippet with a little more of the nitty-gritty from today's blog post announcing the agreement:
“By adding Google to our list of world-class contextual ads partners, we will be able to expand our network, which means we can serve users with ads that are even more meaningful,” Yahoo said.
Significantly, for our users, there would not be a noticeable difference in how or where ads appear. More options simply mean greater flexibility. We look forward to working with all of our contextual ads partners to ensure we are delivering the right ad to the right user at the right time.
But more importantly, it will be interesting to see what percentage of the newly partnered ads end up being delivered to mobile devices, a key growing market segment for Yahoo.