Yahoo has now signed a paid search agreement with Google. People are saying the obvious – this gives Google monopoly power – and will drive down bid prices on Yahoo, which will make Yahoo need Google even more in the future. I can agree with that, but given Yahoo’s beating, it’s tough for them to turn down the increased revenue they’ll be seeing from the Google deal.
Yahoo basically did say “we give up” in regards to the paid search market. Such a shame too, considering they were the leader [and purchased the founder of this technology - Overture].
But what I’d like to see now is Yahoo and AOL merge. They are so alike, it’s sick. And they control nearly all the display advertising companies that exist (aside from Google’s Doubleclick and Microsoft’s aQuantative).
And since Google now has the deal with Yahoo, Google likely wouldn’t oppose an AOL/Yahoo merger (given Google’s 5% stake in AOL). Then, Yahoo/AOL would have a combined XXXmm daily pageviews and YYYmm monthly unique visitors.
I think privacy concerns have lessened these days and they could put that combined power into delivery very targeted display ads. I’d also get in cahoots with the ISPs and track users’ webpage viewing habits even more precisely [knowing every single webpage a user visits, not just those that have Yahoo/AOL display ads on them].