Yahoo Two-Timing Bing & Google with New Deal

Yahoo Two-Timing Bing & Google with New Deal

News broke earlier this week that Yahoo and Google are close to a three-year deal that would display Google ads on Yahoo SERPs. Both parties are on board with the deal, but the final determination may lie with US, EU, and Indian authorities due to the size of a united Google and Yahoo.

The scope of the services Google will provide to Yahoo are:

  • Search advertisements through Google’s AdSense for Search service (“AFS”),
  • web algorithmic search services through Google’s Websearch Service, and
  • image search services.

The results provided by Google for these services will be available to Yahoo for display on both desktop and mobile platforms. Google’s contributions to Yahoo’s desktop search would be limited by Yahoo’s deal with Microsoft, which was renewed in April of this year. Microsoft is guaranteed to provide 51% of Yahoo’s search results; so Google could, at most, provide 49% of Yahoo’s desktop search results.

Since the Yahoo/Microsoft deal is limited to desktop, Google would be unrestricted in providing search results and ads to Yahoo’s mobile SERPs.

The deal as written leaves significant room for Yahoo to choose whether or not to use Google’s results at all. There is no minimum use guarantee provided by Yahoo in the deal.

The largest potential obstacles to the deal are with the regulation agencies in the US, EU, and India. The US Department of Justice prevented Google and Yahoo from entering into a similar deal back in 2008, on competition grounds. Yahoo was, at the time, the second-largest search provider in the United States. Yahoo has now dropped to third, behind Bing, so the competition protection concerns will be different this time around (and presumably weaker). If the DoJ objects this time, the deal will not proceed.

This Yahoo/Google deal does include India, where Google is currently facing antitrust scrutiny (but no action), but excludes Europe completely where they are also facing antitrust action. Within the deal is language specifying that if either the EU or India reject the deal, the deal as a whole will be dissolved.

If the deal is approved by the regulatory agencies, Yahoo becomes something of a Frankenstein search provider. They’re the third largest search results provider in the US, which is still a significant volume of traffic. But they would be serving up different search results provided by three different search algorithms: Bing (51%), Google (up to 49%), and their own algorithm (the remainder). I’m not sure how this will be received by typical end users, or users who are aware of this amalgamation (like SEOs). From where I’m sitting, Yahoo is not where I’d look for consistent search results in either a personal or professional capacity.

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