Yahoo’s rejection of Microsoft has been big news recently, but it does not surprise me. In fact, it makes perfect sense that Yahoo would partner with Google. Yahoo is best as a portal where people go to get email, news and other information customized for them. Google is best as a search engine and online advertising company.
Yahoo’s attempt to run pay per click (PPC) ads has failed, primarily because their interface is so difficult to use. This is ironic because Yahoo bought the originators of PPC, Overture.com (before that they were GoTo.com). Microsoft’s PPC is not useful for most online advertisers.
The bad news is the Google and Yahoo partnership may run into problems as the government reviews antitrust issues. People on Capital Hill may not understand how online marketing works and come to the wrong conclusions, which would be bad for Internet buyers and advertisers.
PPC is a self-regulating marketplace. Advertisers will only pay an amount that brings them ROI. If Google and Yahoo don’t show ROI, then advertisers bail. It makes good sense to have one interface to manage PPC and Google is the clear winner in this area. It will only make PPC a stronger advertising source when it reaches more people.
Yahoo would be a much better resource with Google’s help and all sides will win, except Microsoft who will probably be driving the lobby to block this partnership.