Yahoo Demos New Ad Platform -- Should Google Care?

Includes: GOOG, YHOO
by: Tate Dwinnell

In a bid to catch Google (NASDAQ:GOOG) in search advertising, Yahoo (NASDAQ:YHOO) unveiled portions of its long awaited platform at the Search Engine Strategies convention in San Jose yesterday. There doesn't appear to be any earth shattering features at first glance, just "me too" features in line with what Google already provides such as targeting geographic areas and creating budgets for their campaigns.

The one glaring difference is the abolishment of an auction style bidding system in which companies bid for placement in the search engines. Some businesses are already complaining because of the lack of transparency. In the existing Yahoo system (as well as Google), customers could bid just one cent more to appear higher in the search engines. Not knowing what others are paying for keywords takes this advantage away, potentially creating more revenue for Yahoo.

However, the lack of transparency may drive advertisers away. We shall see. Yahoo's new system is set to launch in the 4th quarter or in the first quarter 2007. Given, the long delays already, I'd put my money on the first quarter at the earliest.

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