Under terms of the search partnership, Microsoft guaranteed for 18 months the revenue per search for ads that appear on Yahoo sites. In 2011, the companies extended the guarantee through March 2013.
On February 1, Google implemented new rules for application and toolbar distribution through its third-party ad products (Adwords and Adsense). The most onerous of these new “rules” requires that homepage conversions be “opt in” versus “opt out” previously […] Based on our channels checks, toolbar/application companies have shifted 50%-90% of their traffic to other search providers, with Yahoo being the biggest beneficiary. For the sake of our Google model, we are lowering our estimates to reflect the low end or a 50% reduction from non-exclusive partners. This equates to $1.3 billion, or 3% of total core net revenue.
Time to short IACI?
In March 2012, eBay conducted a controlled trial to see what would happen if they shut off this “branded keyword advertising” by halting their purchases of search ads containing the word “ebay” on Microsoft and Yahoo search engines, while continuing to purchase search ads on Google as a control. There was no change in eBay sales via Yahoo and Bing, relative to those that came through Google — consumers simply substituted clicks on the unpaid search listing for the now-absent paid ones.
It appears as though Microsoft has landed a nice win for its search engine, Bing.
Let’s not conflate Terry Semel’s presence with Yahoo’s discovery of paid search running along side their editorial search results.
People forget this, because his last few years at Yahoo were ugly, but Semel actually orchestrated a turnaround at the company following the dotcom bust.
Interesting argument but hard to really build a case without expending a lot of resources:
Webmasters and SEOs at WebmasterWorld say paid clicks are up because organic search results are poorer and Google is showing more ads in place of organic results. They point fingers at the Penguin update.
Nothing we didn’t already know.
Search-ad revenue driven by Google’s browser helps the bottom line, the chief of Google’s browser and online apps business says. With Chrome now on Android and iOS, he’s expecting even more money.
That’s a rich valuation for a toolbar company:
Conduit empowers web and mobile publishers to engage their users across multiple platforms. From Community Toolbars and mobile apps to notifications and web bars, the company’s products enable publishers to constantly connect with their users wherever they are.
Schachter believes Google searches on Apple devices resulted in $1.3 billion in gross revenue. He believes Google has a 75% traffic acquisition cost associated with that revenue. As a result, Google only gets $335 million in net revenue from searches on iOS and Safar
And this is good because:
Because then we can keep using it as a major competitive advantage.
[edit: added intro to put quote in context]
Fred’s been saying this for a while and when he mentioned this last year, this was my response:
That’s Fred Wilson’s advice. I had mixed feelings about his original post because although the message felt wrong, if legions took it as gospel, it means less competition for me in any channel other than earned media and social media!