Posted June 12, 2008 6:42 pm by with 10 comments

Tweet about this on TwitterShare on LinkedInShare on Google+Share on FacebookBuffer this page

A couple hours later than expected, Yahoo and Google have finally announced a non-exclusive advertising agreement.

Yahoo began a small test of Google advertising in April and was quickly impressed with the results—but then they left us hanging, waiting for an announcement for nearly two months.

Yahoo’s press release reassures us that they’re not abandoning the Panama paid search platform:

The agreement enables Yahoo! to run ads supplied by Google alongside Yahoo!’s search results and on some of its web properties in the United States and Canada. The agreement is non-exclusive, giving Yahoo! the ability to display paid search results from Google, other third parties, and Yahoo!’s own Panama marketplace.

Under the terms of the agreement, Yahoo! will select the search term queries for which – and the pages on which – Yahoo! may offer Google paid search results. Yahoo! will define its users’ experience and will determine the number and placement of the results provided by Google and the mix of paid results provided by Panama, Google or other providers. The agreement applies to paid search and content match and does not apply to algorithmic search. The agreement also applies to current partners in Yahoo’s publisher network.

Yahoo emphasizes the benefits to users and advertisers, the &c., but also highlights the primary motivation driving the deal:

At current monetization rates, this is an approximately $800 million annual revenue opportunity. In the first 12 months following implementation, Yahoo! expects the agreement to generate an estimated $250 million to $450 million in incremental operating cash flow.

Hm… Not quite $44.6B, but not too bad.

Google’s press release also emphasizes that Google and Yahoo will work on integrating their instant messaging clients.

Andy adds: Here’s what stood out to me…

  • Yahoo will select which keywords and content will display Google paid search results.
  • Yahoo expects to see an additional $250 million to $450 million in revenue over the next 12 months.
  • If Yahoo gets acquired in the next 24 months, and the deal is terminated, it will pay Google $250 million, less any revenues earned by Google.
  • Yahoo and Google have agreed to make sure their instant messenger technology is interoperable.
  • The deal will not close for 3 and a half months, to allow for any DOJ review.
  • Well well well…Finally things are rolling! Not bad! But three and a half months seems like tooo long….

  • Pingback: Yahoo and Google Announce Agreement - WebProWorld()

  • Saad kamal, you are right. Why is it taking so long??

  • This slight progress hopefully will give a light to the endless story.

  • Pingback: Tom Doyle :: TALK » Blog Archive » Google and Yahoo! join forces on contextual search ads()

  • Maybe it’s paranoidism, but don’t you think that partnership in financial deals look like merge of main part of search engines now. Does anyone remember Microsoft? 🙂

  • PS3

    Yahoo has typically been more relaxed about some of the keywords it has allowed but I wonder if they will ultimately bow down to the big G’s way of doing things.

  • Ok, so someone tell me how this isn’t the beginning of the END for Yahoo? I wasn’t a real big fan of Microsoft buying them out, but admitting your main rival has better Advertising products and actually using them!? Short term this is a good thing for Yahoo as it’s some much needed funds, but long term it’s an inevitable death is it not?

    I do think Yahoo is doing some great things on the Analytics, Index Tools, and Social Media, Yahoo! Buzz, fronts but there isn’t any money in either of those besides that which is made off the advertising front, which their big brother is going to get a cut of every dollar them make now!

    Kyle James’s last blog post..Making a Status Updates Across the Social Media Universe

  • yikes, this must be hurting msn , big time

    reviewinfo’s last blog post..Workers strike into question supply in the UK

  • Finally they get together… I wonder how long the honeymoon will last and just how sweet the money will be…

    Eva White’s last blog post..Canada’s Apology To The Indian People