Rumored Microsoft-Yahoo! Deal Is Smart for Both Companies, and Helps Out Advertisers

Paul Koch, Former Data & Analytics Director

Article Category: #Strategy

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Yahoo! has apparently taken to heart the phrase, “If you can’t beat them, join them”.  Yesterday AdAge reported that the company will likely strike a deal with Microsoft to replace its own search engine with Bing’s. 

The deal, expected to be announced this week, is a great strategic move by both Yahoo! and Bing.  Although the deal forces search marketers to adapt their tactics, it also gives them some new opportunities to expand and (hopefully) streamline their processes. 

Although I ripped Bing in a prior blog post, they deserve props for this business decision.  Aside from beefing up the number of Bing users (to 30% of the search market, according to AdAge), the Yahoo!/Microsoft deal creates synergies, making 2+2=5.  How many companies, especially small businesses, would have paid for coverage on both sites, but chose only one because the time constraints of building and optimizing two separate campaigns weren’t worth the incremental traffic?  The deal removes this barrier. 

Yahoo! now has a way to maintain its brand despite its dying search engine.  Bing has hurt Yahoo! a lot more than it has Google, and with the massive investment Microsoft plans to dump into Bing, Yahoo! would certainly have had to match the investment to compete.  Instead, Yahoo! can utilize Bing’s more powerful search engine to drive visitors to entertainment, news, and sports sections of the site (a recent focus), while still earning revenue from search ads.


Source: Compete

The change will undoubtedly require adaptation from search engine marketers, but I don’t think that’s a bad thing, necessarily.

Here’s what I’m most excited about: the potential to optimize small campaigns better.  When clients have small budgets and extremely-targeted campaigns, it can be hard to tell which keywords are working and which are not, since the number of impressions and clicks for each keyword can be relatively small.  If this information is consolidated into one advertising platform, rather than spread out between Panama and adCenter, search marketers will have more campaign numbers, leading to clearer decisions. 

Plus, a new report shows that click-through-rates on Bing are 50% higher than Google and 20% higher than Yahoo!— might we see an increase in traffic from Yahoo! in the future?  And who can complain about anything that pressures Google to become better? 

It might require some extra short-term work for marketers, but in the end, I’m all for anything that helps out the little advertiser, makes decision making easier, and pressures the rest of the industry to step up its game.

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