Our Google deal

Posted June 12th, 2008 at 4:49 pm by Jerry Yang, CEO & Chief Yahoo

 21 Comments / Filed in: Trends & News

It’s no longer a rumor. We have inked a deal with Google in which AdSense ads can run alongside Yahoo! search results in the U.S. and Canada.

Our strategy to fully realize Yahoo!’s potential is based on the convergence of search and display — the next big opportunity in the rapidly growing online ad industry. This agreement helps us capitalize on that. We’re moving full speed ahead to execute with speed, commitment, and passion.

It’s also in keeping with our open strategy — WebMD sells their audiences on Yahoo!, Yelp can customize how their local search results appear using Search Monkey, advertisers and publishers will buy and sell in an open marketplace with our upcoming AMP! from Yahoo!, and we’re now opening our paid search results to Google.

I wanted to put this arrangement in perspective and comment on what it is and what it isn’t. First, it does not signal that Yahoo! plans to exit paid search. Quite the contrary. Through the financial benefits of better monetizing our search traffic, we’ll be investing in search services and ad platforms, including Panama. An independent search business is critical to our future. We will retain complete flexibility and will call the shots on where and how often Google ads will appear. While Google has better advertiser coverage in some query areas, we still have the ability to provide Panama ads where they are most valuable.

Second, this deal is good for competition. It may seem counterintuitive that doing a deal with a competitor would improve our competitive position. But as search and display continue their convergence, it puts Yahoo! in a better position to innovate and compete aggressively with Google and others for ad dollars. It also offers advertisers more choice and publishers gain better distribution and monetization to grow their business.

Finally, this agreement is non-exclusive. We remain completely free to display any paid search listings across our properties — whether from Yahoo!, Google, or any other third parties.

We’ve done something important today. We are directly addressing one key element in Yahoo!’s strategy to lead the way in search and display. I believe it puts us on a faster track to creating stockholder value and strengthening our advertising leadership.

It is, of course, just one step. We’ll continue to look at all of our alternatives to advance our strategies and enhance growth and profitability.

Jerry Yang
Chief Yahoo and CEO

Tagged: google, online advertising, panama

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21 Comments Add your own

freddyb | June 12th, 2008 at 9:31 pm

how is this a good thing for Yahoo! jerry? this is a desperation move to save face which hands the keys to the kingdom over to google for a small price… i look forward to reading future comments here - i certainly hope that a few Yahoo Employees comment in this space as any equity they have in the company vanishes before their eyes.. $23 a share at present - well played Jerry…. well played….

Softview | June 13th, 2008 at 3:05 am

great news!

andrei | June 13th, 2008 at 4:02 am

Despite this deal Yahoo shares are still low, Microsoft shares are growing and Google just got acces to the Yahoo advertising network. I don’t know if deals with any of the sides (Google or Microsoft) are good for Yahoo. I think that you can find a solution that can keep the company independent.

skeptical | June 13th, 2008 at 6:34 am

jerry jerry jerry… stock’s down another 3.5% today… when will you blog about the plan to get the stock to the $33 a share level which would have been realized through an acquisition? Really looking forward to seeing this plan… surely you’ve got something up your sleeve to drive this future valuation.

Cliff | June 13th, 2008 at 9:07 am

Google’s knocking on Yahoo’s! door. It won’t be long before Yahoo! goes the way of AltaVista. Yahoo! will soon become another Google domain. Talk about sleeping with the enemy.

Jonathan Alvarez | June 13th, 2008 at 11:20 am

Nice for the deal. The future becomes so interesting! Would you can give us a interview for talk about the Yahoo!’s future?
http://highendmagazine.com/2008/06/13/google/

My best

Andrew | June 13th, 2008 at 11:40 am

Congratulations. This is a great move that Yahoo should have done a few years ago!

Adi Moga | June 13th, 2008 at 11:48 am

It seams to be a fair game from google. Did you guys tried to make a search engine based on human feelings ?

EdSF | June 13th, 2008 at 3:47 pm

Hmmm, so as an advertiser on Google AdWords, why would I keep my Yahoo Search Ads/Search Marketing (YSM) going?

I’m sorry, this is an overlap for advertisers. We’re obviously NOT going to spend twice for the same “impression”…unless of course YSM will fade into the sunset.

So with that in mind, is this a great move? Honestly, I hope it is…even if that view escapes me.

Best of luck…gotta re-think our spend on YSM and either move most of it to Google AdWords or Microsoft AdCenter…

Shaon Diwakar | June 13th, 2008 at 11:39 pm

Indeed a daring move on Yahoos part :-)

With regards to the frustrated shareholders - I can understand their point of view (after all - they finance the company); however this does not give them the insight that management within an organisation has over its domain.

The main goal must be to ensure Yahoo! maintains a successful, profitable business all whilst balancing the firms ethics and responsibilities to its employees. Although forging ties with Google is not new - Google once powered Yahoo’s search engine (in fact this was not too long ago) - and I can’t see how this would be considered “sleeping with the enemy” ?

Best of luck!

srikanth remani | June 14th, 2008 at 2:11 pm

Yahoo! just screwed itself royally. Jerry will the rich but many people who have invested in Yahoo will remain with no profits or enough returns for their retirement. Yahoo! is not entitled to be independent, Microsoft gave it great deals one of the initial ones the dumb Terry Semel turned-down was $41.50 per share. Jerry turned down a 62% premium buy from Microsoft. It is not important for Yahoo! to be independent what is important is the ability to be profitable and give returns to the investors. If Jerry wants Yahoo! independent, he should do a stock buy back and go private. You cant have your cake and eat it too!.

Toya | June 15th, 2008 at 9:10 am

It is a good news…Good luck!

Amaan Goyal | June 16th, 2008 at 7:58 pm

I think Jerry you made a decision keeping in mind ecomocis of business. Google and Yahoo command major share of PPC market share. By inking this deal you cement your position and also provide webmasters a tool of using Google Adsense and Yahoo Search Marketing more effectively. The idea at the end of the day is to stay afloat , provide a good service and bring revenues to the company, this deal is a move towards it . Good Luck with the deal and hopefully it works in the interest of both the companies.

cnick | June 17th, 2008 at 6:15 am

It sounds like Yahoo’s board know what they are doing signing this deal with a giant like Google.

Stakeholders are really upset from last week’s shares prices and i don’t think they will wait long befoe reacting agressively.

Ralph Martinsen | June 18th, 2008 at 2:48 am

I held my 5000 shares of Yahoo thru thick and thin. Sold once to take a major loss for tax reasons, then bought back in.

Just sent in my proxy to withold votes for ALL directors.

I am working hard to make some capital gains elsewhere so I can use Yahoo for a balancing loss again

Hope to see you and your poison pill compensation packages in court in the near future.

LarsGerd | June 21st, 2008 at 4:30 am

Dear Jerry,

interesting move, but I think you should
focus on new inventions, go new ways to reach
more partners and cutomers to generate
a higher cash flow using your existing
advertising platform.

Best Greetings from Italy.

Sincerely,
Lars

God | June 21st, 2008 at 9:49 am

I wonder, why Yahoo never got its own Ad-System together. The Overture thingy was/is a pain in the ass.

Alex | June 25th, 2008 at 6:20 am

I think that this deal with Google is only temporary thing. I’ve heard that Microsoft wants to buy Yahoo’s search engine. I’ll suggest if you decide to sell to offer them not a part like they want but the whole package only this time with little discount like for example 36 $ for a share. I’m sure they will take it and everybody will be happy and later you can buy me a beer for the advice. :)

Tom Lee | July 1st, 2008 at 3:07 am

Yahoo! Could be up for grabs by Microsoft only if they are willing to pay enough for them, only time will tell who will be the winner in the search war.

Craig | July 6th, 2008 at 2:27 am

Pretty sure MSN is now the only one left without a hand in Google’s cookie jar.

So much for competition…

Buzz | July 30th, 2008 at 12:14 am

Google owns the internet. Period.