Posted April 9, 2008 4:39 pm by with 12 comments

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goohoo logoIn an announcement made just moments ago, Yahoo has formally decided to try a limited test of Google’s AdSense for Search program in their search results. From the release:

The test will apply only to traffic from in the U.S. and will not include Yahoo!’s extended network of affiliate or premium publisher partners. The test is expected to last up to two weeks and will be limited to no more than 3% of Yahoo! search queries.

In response to speculation earlier today, Business Week’s TechBeat pointed out that “Analysts have long pointed out that Yahoo could jack up its profits overnight by outsourcing its search advertising to Google, which generates much more revenue per search than Yahoo. Indeed, such a deal has been rumored for at least the past year.”

Granted, this could potentially increase Yahoo’s search profits—but honestly, are they going to be the only ones? Google’s gotten big press for allegedly faltering growth in AdSense clicks. Increasing their ad real estate might be one way to help increase their stalled click growth, not to mention their income.

Many are claiming that the move is a clear response to Microsoft’s threats of a hostile takeover. And while that may be true, as paidContent points out,

[I]t can’t legitimately be called an alternative route for Yahoo, given that it doesn’t do what Microsoft’s offer does—namely pay Yahoo shareholders somewhere around $31 per share. The [original Wall Street Journal] article notes that this alone wouldn’t necessarily torpedo a deal. But if Yahoo can come in with a strong Q1 and show convincengly [sic] that pulling this lever would lead to a positive revenue impact, then it could at least bring shareholders around to the idea that an independent Yahoo is the way to go.

In its announcement, Yahoo seems to confirm this, stating that “Yahoo!’s board of directors is exploring strategic alternatives to maximize stockholder value, including exploration of potential commercial business arrangements.”

This isn’t the first time that a potential deal has been rumored—last month we speculated that if Yahoo bought AOL, they might both end up using Google for search. But this time, with the deal already confirmed by Yahoo, it appears a bit more serious. What might this mean for the future of Yahoo’s paid search program—and their fortunes for search in general?

  • Haha – Goohoo, I love it!

    Have you (or anyone else for that matter) got any screenshots?

  • Jordan McCollum

    I haven’t seen any screenshots yet, but I would be surprised if there were a big difference, considering how similar their SERPs already are, and the fact that (I think) this will probably be a white-label deal (if Yahoo’s smart, anyway).

  • Would like to hear from big AdSense users to hear if they are seeing an increase in revenue from this as well.

  • Sorry meant to say AdWord users.

  • This news is very interesting…I am very currious to know what happen next.

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  • What does this say about Yahoo’s new(ish) ad platform. They’ve basically sent the message that even they don’t believe it’s any good. If it’s not careful, it could end up with a lot of advertisers who feel the same way.

  • All of this search engine co-mingling seems so incestuous. What’s gotten into these companies lately?

  • Interesting. It’s a shame though that Yahoo! is giving a sign of weakness against their archenemy.
    GooYa! 😀

  • At begin I thought that is 1st April joke. But than i check post date. 🙂

  • Should we be excited or scared about the GooHoo monster?

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