MS의 야후 인수가 점차 현실로 다가오는 듯….

FD:I’m long yhoo.

yoo iz pwned yang!

Hopefully someone (somewhere) is developing a rival search engine (that’s half way decent), otherwise we may see an internet cold war develop for the next decade (assuming both companies are able to maintain their mojo over time).

A few thoughts on the current Yahoo/Google test:

If Yahoo would quit monetization (and handing their own properties over for monetization to Google would essentially mean this), this would be bad for the Internet industry. It would mean a monopoly for Google on that crucial part of online advertising.

Sure, it would be good for Yahoo in the short term – it’s common knowledge that Google usually performs better on search monetization (”volvo x70 car dealer boston”) , because their entire system is based on search and based on the long tail. This does not mean, however, that Yahoo underperforms all the time. Yahoo’s system – from the old GoTo days – has been built around high-paying keywords with large volume, so they often even outperform Google considerable on those (”car dealer”). Depending on the application, the latter is often more relevant, and Yahoo has some clear advantages for publishers, too.

(3) The move would be bad for Yahoo in the long term. They’d be a publisher without advertising sales. Image New York Times or TIME Magazine being 100% dependent on a print advertising sales agency which owns a monopoly on advertising sales? Unthinkable! But that’s exactly what would happen. Google would dictate terms, policies, usage areas, no matter on how good their contract would be phrased.

(4) There is an inherent inventory / conflict of interest problem which Yahoo might not have considered… well, I’m sure they have, but it might have been pushed to the back of their mind in the heat of the moment. We can be pretty sure from publishers’ experiences, Google stockholder reports with their focus on TAC (traffic acquisition costs) and Google’s general strategic direction that one of Google’s agendas is to funnel more an more advertiser budgets and resources to their own sides opposed to third-party sites. Seeing it from Google’s perspective, it’s makes of course sense: why have an advertiser spend 1 $ on a partner site, where they make like 30-40 cents, and not on their own site, where they reap the entire 1 $. This inherent conflict of interest by the way has been leading to publishers fleeing DoubleClick after their acquisition by Google, as reported today in a European newspaper.