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Yahoo Search Ads Remain Google-Free

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At one point, Yahoo seriously considered doing for its search ad business what it had once done before: allowing Google to serve those advertisements.

Yahoo could have returned to the embrace of Google’s profitable contextual ad machine, or partnered with Microsoft and its new adCenter service, to deliver its search advertising. Doing so would have been a horrible indictment of Yahoo’s new search marketing system, dubbed Panama.

The Wall Street Journal cited an unnamed source, who said a Yahoo insider brought up the possibility of a new deal to Google. That report claimed the move could deliver hundreds of millions of dollars to Yahoo’s annual revenue.

But Yahoo’s once-and-future CEO, Jerry Yang, ultimately nixed the idea. He was more in favor of keeping all of Yahoo’s options in-house, to better serve Yahoo’s advertising clients.

Yang’s first hundred days had looked a little brighter last week, but the post-Labor Day bump from a couple of Wall Street analysts who overweighted Yahoo’s stock has faded. The stock returned to languishing below the $24 mark.

One major investment fund voted with its feet after an unproductive meeting with Yahoo’s management last month. Glen Kacher, managing director of Integral Capital Partners, said in the report his firm sold all of its Yahoo stock after that meeting.

“We decided that the management isn’t considering the kind of transformational changes that would be required to improve their position in the market,” Kacher said in the report.

Yahoo Search Ads Remain Google-Free
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