programme is finally going to get some competition.
What does Yahoo's move into lower-traffic site advertising
mean for the Web?
Yahoo is poised
to launch an ad network for small Web publishers styled
on a similar offering from Google, sources familiar with
the plan told ZDNet UK sister site CNET News.com, a move
that promises to sharpen competition between the search
While Yahoo and
Google already go head-to-head for major search advertising
partners such as America Online, Google has largely enjoyed
a monopoly serving its signature text-only ads to smaller
Web sites, including blogs.
Now Yahoo plans to
launch its own advertising option for small publishers,
a source familiar with the plan said. Like Google's service,
Yahoo's self-serve product will display text ads deemed
relevant to the content of specific Web pages. Advertisers
pay only when a reader clicks on their ad. Yahoo and publishers
will split the fees.
UBS Warburg this
week upgraded Yahoo on expectations that the company will
enter this new arena. In a further sign that a launch
may be imminent, text ads have recently been spotted on
some Yahoo employee blogs.
director of business partnerships for Yahoo subsidiary
Overture Services, confirmed in an interview last week
that Yahoo is interested in the market, although he declined
to discuss details. "We're headed in that direction,"
Yahoo's push to
expand its advertising reach comes as the market for
search advertising is taking off, fuelling record revenue
and profits at the Web portal. At the same time, Yahoo
is busy looking for new revenue sources as it seeks to
transform itself into an online media conglomerate and
beat Google in the Web search game.
Tapping small publishers
offers a promising growth path, given Google's earlier
efforts in this niche.
In June 2003,
Google expanded its ad services for large publishers,
dubbed AdSense, adding a self-serve, automated product
specifically aimed at small sites. As opposed to search-related
ads, which are triggered by keywords entered into its
search engine query bar, AdSense ads are targeted to the
content of a page and its meaning. For example, a news
story about a soccer match might display a sponsored link
for soccer gear.
Google does not break
out AdSense sales but includes them in a broader category
that encompasses all syndicated search revenue. Collectively,
those businesses made up 48 percent of Google's $3.1bn
in revenue in 2004.
Bringing ads to
small publishers would expand Yahoo's current advertising
portfolio, which caters to its search engine and larger
subsidiary, which will be renamed Yahoo Search Marketing
next month, has served ads to publisher Web pages since
2003, in a program called Content Match. The service is
designed for large publishers, such as The Financial Times,
and requires a vetting process to ensure quality when
it comes to matching pages with ads.
Yahoo has shown increasing interest in courting small
publishers of late. Speaking at the Search Engine Strategies
show in New York last week, Yahoo co-founder Jerry Yang
hinted that the company would do more to cater to the
small content owners. Yahoo also recently released Y!Q,
code that analyzes the text of a Web page and shows search
results based on its content. Publishers can add the code
to their Web pages to automatically generate a list of
Yahoo also recently
launched a publisher alert service to notify publishers
of new publishing and advertising tools.
responded positively to news that Yahoo plans to compete
with Google, given Google's unchallenged pricing power
to date. Many publishers and industry watchers have also
criticised Google for its rigid partnership contracts,
which prevent publishers from having visibility into the
total money generated from AdSense on their sites and
disallow customers from talking about their paychecks.
competition should force AdSense and others to give the
publishers a bigger piece of the pie," one publisher
wrote on the Webmasterworld.com forum.
Yahoo will face
several sticky issues by entering the self-service,
automated side of the business. Matching content-targeted
ads can also be tricky, and by opening up the service
more broadly in an automated fashion, Overture could
run into problems.
for example, in the past matched a Fox News article,
"Deep Fried Turkey Can Be Dangerous," with
ads to buy a deep fryer at Amazon.com.
In another problem
for the industry, fraudulent Web site operators
have been known to erect phony sites to bilk money from
Google's self-service ad program a strategy known as
click fraud. A click thief might create a Web site featuring
legal information and tips, based on the fact that legal
ads often fetch high fees per click. It would then sign
up with Google's self-service program to display legal
ads, and then unleash an automated bot to click on the
ads. If the fraud goes undetected, Google would send
a check to the site owner.
Yahoo already employs
algorithms and detection methods to fend off click fraud.
The company is likely to use some oversight in allowing
new publishing partners, according to a source
mailings, click here