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Wednesday, October 21, 2015

Yahoo reaches search deal with Google after loosening Microsoft ties

Yahoo CEO Marissa Mayer. (GeekWire File Photo) — Yahoo CEO Marissa Mayer was previously a Google exec. (GeekWire File Photo)

Updated below with Microsoft statement.

Yahoo just announced a search deal with Google, taking advantage an earlier revision of its longtime Microsoft search pact that gave Yahoo the ability to use alternative services to power its Internet search and advertising services.

The deal between Google and Yahoo was disclosed a short time ago in a regulatory filing by Yahoo. Under the arrangement, Google will provide web search results, search ads and image search services for an unspecified number of Yahoo user queries, on both desktop and mobile platforms.

According to the regulatory filing, the non-exclusive deal allows Yahoo to continue working with Microsoft, as well.

Here’s an excerpt from the filing describing Yahoo’s agreement with Google.

On October 19, 2015, Yahoo! Inc., a Delaware corporation (“Yahoo”), and Google Inc., a Delaware corporation (“Google”), entered into a Google Services Agreement (the “Services Agreement”). The Services Agreement is effective as of October 1, 2015 and expires on December 31, 2018. Pursuant to the Services Agreement, Google will provide Yahoo with search advertisements through Google’s AdSense for Search service (“AFS”), web algorithmic search services through Google’s Websearch Service, and image search services. The results provided by Google for these services will be available to Yahoo for display on both desktop and mobile platforms. Yahoo may use Google’s services on Yahoo’s owned and operated properties (“Yahoo Properties”) and on certain syndication partner properties (“Affiliate Sites”) in the United States (U.S.), Canada, Hong Kong, Taiwan, Singapore, Thailand, Vietnam, Philippines, Indonesia, Malaysia, India, Middle East, Africa, Mexico, Argentina, Brazil, Colombia, Chile, Venezuela, Peru, Australia and New Zealand.

Under the Services Agreement, Yahoo has discretion to select which search queries to send to Google and is not obligated to send any minimum number of search queries. The Services Agreement is non-exclusive and expressly permits Yahoo to use any other search advertising services, including its own service, the services of Microsoft Corporation or other third parties.

The regulatory filing notes that Yahoo and Google “have agreed to certain procedures with the Antitrust Division of the United States Department of Justice” to review the agreement, “including delaying the implementation of the Services Agreement in the U.S. in order to provide the DOJ with a reasonable period of review.” Antitrust problems nixed an earlier ad deal reached by Google and Yahoo in 2008.

Yahoo, which just reported quarterly earnings that fell short of analyst expectations, says in a news release that the deal provides Yahoo “with additional flexibility to choose among suppliers of search results and ads. Google’s offerings complement the search services provided by Microsoft, which remains a strong partner, as well as Yahoo’s own search technologies and ad products.”

Yahoo’s deal with Microsoft, which was reached by then-CEOs Carol Bartz and Steve Ballmer more than six years ago, was revised by Yahoo CEO Marissa Mayer and Microsoft CEO Satya Nadella earlier this year. The revision ended the exclusive arrangement between Yahoo and Microsoft on the desktop, allowing Yahoo to explore partnering with others, as well. Mayer was a Google executive before joining Yahoo as CEO.

Google continues to dominate the U.S. search market, with nearly 64 percent of queries as of last month, compared to 20.7 percent for Microsoft and 12.6 percent for Yahoo, according to the latest ComScore data. Yahoo’s share has slipped significantly since striking the original deal with Microsoft.

Update, 3 p.m.: Microsoft offered this statement in response to our inquiry: “We remain committed to the Yahoo syndication partnership and will continue to serve the majority of Yahoo traffic as outlined in our contract extension. Yahoo is a valued partner and we look forward to continuing to serve our advertising customers through the Bing Ads marketplace.”

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Wednesday, May 20, 2015

Yahoo Appoints Laurie Mann as CIO, Replacing Mike Kail

Yahoo! Inc. said it’s promoting Laurie Mann to chief information officer, replacing Mike Kail, who is stepping down after less than a year on the job.

Replacing Mann is Enrique Munoz Torres, who has been promoted to senior vice president of product and engineering, overseeing search, the company said in an e-mailed statement Tuesday. Torres was a key player in developing the company’s Gemini platform, which combines search advertising with “native” promotions that are designed to blend more seamlessly with digital content.

Kail chose to leave, Yahoo said, without giving further comment. The executive has faced legal challenges since joining the Web portal. In November, his former employer, Netflix Inc., sued him for fraud, claiming he took cash kickbacks from two suppliers and had deals to receive stock, money or gift cards from other vendors. Kail didn’t immediately respond to a request for comment.

Chief Executive Officer Marissa Mayer is trying to drive a turnaround at the company, which has struggled to add users to woo advertisers. Kail’s departure is the latest in a series of management shakeups. Kevin Gentzel, is leaving the company after less than a year, Yahoo said in a message earlier this month. Last month, the company said Senior Vice President Mike Kerns is planning to leave as Yahoo focuses more attention on emerging businesses.

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Thursday, April 30, 2015

Is the Yahoo Bing Network Emerging From Google’s Shadow?

In mid-April comScore reported that for the first time Bing reached a 20 percent search market share in the United States. Adding in the 12.7 percent of U.S. searches conducted on the sites of its search alliance partner, Yahoo, and the Yahoo Bing Network’s effective search market share is now nearly 33 percent. While this figure is still far behind Google’s 64.4 percent of U.S. search share, as detailed in the same report, it’s on the rise; in December of 2012 comScore reported Yahoo Bing accounted for 28 percent of the search market vs. Google’s nearly 67 percent.

Judging by these numbers alone you would think there would be high adoption of the Yahoo Bing Network by search marketers. However, that’s not the case. We recently published a study of paid search performance on the Yahoo Bing Network and Google AdWords across six industry verticals in 2014 and found on average just 32 percent of advertisers had an ad display on the first search engine results page (SERP) of both Google and Yahoo Bing during the year, compared to 66 percent who displayed a first SERP ad on Google alone, as well as a mere 2 percent who displayed a first SERP ad exclusively on Yahoo Bing.

The implication, of course, is that the 66 percent of companies advertising on Google alone may potentially be missing out on one-third of consumer searches. If that’s not incentive enough for these advertisers to investigate Yahoo Bing, consider these additional facts:

Performance on Yahoo Bing Improving at a Faster Rate

Without a doubt Google AdWords offered higher click-through rates than Yahoo Bing in 2014; Google’s average click-through rate across all six verticals we studied was 5.47 percent — 126 percent higher than Yahoo Bing’s 2.42 percent average CTR across the six verticals. However, the gap between the two search engines has narrowed considerably since the last time we conducted this study in the third quarter of 2012, when Google’s average click-through rates were actually 265 percent higher than Yahoo Bing’s.

What’s significant is the reason why. In short, performance on Yahoo Bing is improving at a faster rate than performance on Google AdWords: Yahoo Bing’s average click-through rates improved by 175 percent from Q3 2012 to 2014, while average click-through rates on Google improved at a healthy but far lower rate during the period, just 65 percent.

Some Get Higher CTR, Better Positioning on Yahoo Bing

While overall Google offered a superior average click-through rate in 2014, there were groups of advertisers in all six verticals who sponsored paid search campaigns on both engines and saw higher click-through rates on Yahoo Bing than Google last year.

Most significantly, 18 percent of advertisers in the Shopping and Classifieds (retail) vertical who advertised on both engines in 2014 saw a greater click-through rate on Yahoo Bing. In other words, nearly one in five retailers on both search engines had a better CTR on Yahoo Bing, including giants like Sears, Macy’s, and Best Buy. In both the Travel and Automotive verticals that number was 16 percent, and included advertisers such as Hotels.com, Travelocity, Southwest Airlines, Royal Caribbean, Dodge, Lexus, Nissan, and Carfax.

Providing insight into this phenomenon, we found that on average these advertisers’ search ads gained far more favorable positioning on the first Yahoo Bing search engine results page (SERP) than on Google’s, meaning their ads were displayed higher up on the page, making them seen and clicked more often by consumers.

For example, using a scale from zero to 10 — with zero representing the premium or highest position at the top of the page and 10 representing the lowest position at the bottom of the page — the Shopping and Classifieds advertisers with a better CTR on Yahoo Bing experienced an average position of 0.7 on Yahoo Bing compared to an average position of 2.2 on Google, a 66 percent difference. Similarly, Travel advertisers with a better CTR on Yahoo Bing experienced an average position of 0.6 on Yahoo Bing compared to 1.9 on Google, a 68 percent difference, while Automotive advertisers with a better CTR Yahoo Bing had an average Yahoo Bing position of 0.7 compared to 2.3 on Google, also a 68 percent difference.

Lower Cost, Less Competition on Yahoo Bing

Overall Google AdWords offers advertisers an advantage over Yahoo Bing in click-through rates (as noted above) as well as in impressions, delivering 138 percent more impressions than Yahoo Bing across all six categories in 2014. However, the Yahoo Bing Network has advantages of its own. Namely, in cost per click and competition.

The average cost per click on Yahoo Bing was 42 percent less expensive than on Google across all six verticals in 2014. Breaking it down by vertical, within Shopping and Classifieds, the average CPC was 49 percent less expensive on Yahoo Bing than on Google, 45 percent less expensive in Automotive, 35 percent less in Financial Services, 38 percent less in Travel, and 33 percent less in Education. The Business vertical had the largest cost difference between the two engines, as the average cost per click on Yahoo Bing was 63 percent less than on Google.

Together with a lower average CPC, there was far less competition on Yahoo Bing than on Google in 2014. Within the six verticals studied, Google experienced nearly double to more than triple the number of advertisers who gained placement on its first SERP than those who did on Yahoo Bing last year. More advertisers, of course, means more heated competition to reach consumers as well higher CPCs, since competitive bidding increases your cost per click in paid search campaigns.

Should You Advertise on Yahoo Bing — and How?

The obvious recommendation for any search marketer is to test every aspect of your program — including the search engines you advertise on — and measure your results over time in order to understand what works for your specific business. The findings discussed above certainly provide compelling reasons to test the Yahoo Bing Network.

To go beyond the obvious, however, perhaps the question is not so much should you advertise on Yahoo Bing but how.

Yahoo Bing is a very different animal than Google AdWords. Yet it seems many advertisers simply try to replicate what’s working in their AdWords campaigns on Yahoo Bing, almost as an afterthought, and expect the same results.

A more constructive strategy would be to recognize and embrace the difference between the two search engines and try to take advantage of Yahoo Bing’s unique advantages. As a practical example, one approach may be to identify highly profitable keywords for which you’re receiving poor coverage on Google and test those keywords on Yahoo Bing, which offers less competition.

We can’t say for certain how 18 percent of retail advertisers got better click-through rates and positioning on Yahoo Bing than on Google in 2014. But it’s a safe bet they didn’t run the exact same campaigns on both search engines.

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Thursday, April 23, 2015

Yahoo reportedly prepping a new app to compete with Google Now

Yahoo may be behind in the search game, but it could be looking to compete with the likes of Google and Microsoft when it comes to creating a personalized search tool. On an earnings call yesterday, CEO (and former Google executive) Marissa Mayer said that Yahoo was "particularly interested in search in the mobile sector, what happens when you involve context," and it's apparently focusing attention on "what happens when you involve personal information, from things like email." Today, Business Insider reports that a source has provided more details about the project, which is supposedly known as Index.

Index is supposed to be a smartphone app, following up on Yahoo's current Aviate launcher for Android. Aviate acts as a personal assistant using smartphone data and calendar entries, but this would act more like Google Now, mining information from users' inboxes. According to the source, Yahoo is attempting to have a pilot version ready sometime in the second quarter of this year.

On the call, Mayer referred to things like Siri, Cortana, and Google Now as a new and promising kind of search. She said that as mobile moves to "the watch and onto television screens and video," Yahoo wants to help people "make better sense of the content they already have access to, content in their mail," to provide better results. She gave the example of learning that a user had booked a flight from John F. Kennedy Airport, then prioritizing their search to favor practical data and a boarding pass over, say, Wikipedia. Helping users find flight information is a fairly fundamental task for a mobile assistant like Google Now, Siri, or Cortana. According to Business Insider's source, though, Yahoo thinks its advantage lies in sheer longevity:

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Tuesday, April 21, 2015

Google, Yahoo Follow IAB's Advice to Improve HTTPS Encryption

Both Google and Yahoo are continuing to improve their HTTPS encryption, which protects the privacy of information flow in both directions, following recent urging from the Interactive Advertising Bureau (IAB.)

Last month, the IAB wrote a blog post focusing on the importance of making sure that every tag on every page supports HTTPS delivery: ad servers, agency ad servers, beacons from data partners, scripts from verifications and brand safety tools, and any other systems required by the supply chain. To make the change is a bit more complicated than pressing a button, and requires certifications and increased resource requirements on servers.

HTTPS proves the origin of a resource delivered from a server to the Web browser, ensuring trustworthiness and resulting in a larger set of server identifiers. Additionally, given the extra cost of installing malware on its servers, HTTPS decreases the incidence of cyber crime.

Google searches, which use HTTPS as a ranking signal, are already encrypted for many users. Last year, the search giant moved all YouTube ads to HTTPS.

By the end of June, Google will allow its advertisers to serve HTTPS-encrypted display ads to all HTTPS-enabled inventory. Additionally, the majority of mobile, video, and desktop display ads served to the Google Display Network, AdMob, and DoubleClick publishers will be encrypted.

"Strengthening online security helps the advertising industry address the issues such as bot traffic and other types of ad fraud, which allow for more precise audience reach and campaign measurement," wrote James Deaker, vice president of revenue management and ad policy at Yahoo, in a blog post. "The more companies that join us in working together to improve the overall quality of the ecosystem, the better the experience will be for both advertisers and consumers."

Yahoo has spent years transitioning to SSL encryption for all publishers with display ads. Most recently, the company implemented an end-to-end encryption extension for Yahoo Mail. On Saturday, Yahoo will also host the Trust UnConference at its San Francisco office to further the discussion on security.

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Yahoo's new search pact with Microsoft includes opt-out clause

Either company will be able to terminate the amended deal on or after October 1, according to a new regulatory filing.

Yahoo's recently renewed search pact with Microsoft includes a termination clause that allows either company to walk away from their years-long partnership.

The clause, part of an amended search partnership announced last week between the two companies, allows either company to terminate the arrangement at any time after October 1 by delivering written notice to the other company, according to a filing Monday with the US Securities and Exchange Commission. Under the terms of the previous agreement, a 10-year deal signed in 2010, Yahoo could terminate the deal only if certain revenue metrics were not met.

Microsoft and Yahoo announced the amended deal Friday, saying that it gave Yahoo more "flexibility to enhance the search experience" across mobile and desktop devices. In addition, the companies modified their handling of ad sales, with Microsoft now exclusively handling the Bing ads on Yahoo Search and Yahoo continuing to sell ads through its own Gemini ads platform.

The update to the search deal came 6 years into a 10-year pact between the companies. In 2009, the companies' then-CEOs -- Microsoft's Steve Ballmer and Yahoo's Carol Bartz -- signed a deal that would see Micorosoft's Bing platform power Yahoo search. In return, Yahoo would be the exclusive sales force for ads and would receive a significant sum each year to be the brains behind Yahoo search.

Representatives for Yahoo and Microsoft did not immediately respond to a request for comment. A source familiar with the negotiations told CNET that both companies were in favor of the clause, which is seen as encouraging an ongoing dialog and reducing anxiety.

The amended deal comes as the chief executives of both companies attempt to transform the profiles of their respective companies. Yahoo CEO Marissa Mayer has shifted her company's focus to mobile devices and how to generate revenue off those products. Mobile is also a priority for Microsoft CEO Satya Nadella, who is pushing services and mobile with a greater emphasis on cloud services.

However, the relationship hasn't yielded the revenue-per-search guaranteed by the partnership, prompting Microsoft to twice extend the RPS guarantee for another year. Yahoo CEO Marissa Mayer expressed her dissatisfaction with the partnership in 2013, saying that the arrangement hadn't delivered the increased revenue or market share that was expected.

"One of the points of the alliance is that we collectively want to grow share rather than just trading share with each other," Mayer told attendees at the 2013 Goldman Sachs Technology and Internet Conference in February. "I'm not confused. Our biggest business problem right now is impressions."

The amended search deal also modifies the terms of the deal's revenue sharing arrangement. Under the new deal, Yahoo will keep 93 percent of the revenue generated by ads served on its pages. That's up from the 88 percent of revenue Yahoo received for the first five years of the partnership and a 90 percent bump Yahoo received in February.

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Monday, April 20, 2015

Yahoo! Inks Amended Search Deal With Microsoft Corporation For Bing Ads, Mobile Platforms

Yahoo and Microsoft to have more search flexibility along with reallocated ad revenue in new agreement

Yahoo! Inc. (NASDAQ:YHOO) and Microsoft Corporation (NASDAQ:MSFT) executives have updated a long-term search partnership today for an agreement drafted in 2009 when predecessors, Microsoft CEO Steve Balmer and Yahoo CEO Carol Bartz entered a search partnership to rival the seismic Google Inc. (NASDAQ:GOOG), in an agreement that would be revisited mid-way through its inception. The revised partnership arrived after a month of negotiations in two core areas: aiming to allow more flexibility in how search results are displayed as the influence of mobile devices grow and alter the way advertising teams are managed between the two tech giants.

The original agreement left Microsoft in charge of providing Yahoo search services on computers by controlling the technology sustaining search algorithms for both companies across the gargantuan website universe. Yahoo on the other hand, was left with the task of handling revenues from search ads for both companies. In recent times, however, Yahoo has scraped off elements responsible for generating 37% of its ad revenue owing to dwindling traffic. Moreover, the profit-sharing scheme also obliged Microsoft to pay Yahoo 88% of search revenue generated from its site during the initial five years of the agreement.

Current Yahoo CEO Marissa Mayer commented on the partnership that was left to be negotiated between her and current Microsoft Executive Satya Nadella: “Over the past few months, Satya and I have worked closely together to establish a revised search agreement that allows us to enhance our user experience and innovate more in our search business.” As the halfway point of the agreement arrived, the friction between said search partners reached a tipping point as Microsoft shares slipped by 17 cents in morning trading and Yahoo added 4 cents to its share capital of $45.7. “This renewed agreement opens up significant opportunities in our partnership that I’m very excited to explore,” she also stated.

The amended pact permits Yahoo greater control over how search results are presented on mobile and desktop platforms under the condition Yahoo continues using Bing to process the majority of search traffic arriving on the website. Furthermore, Yahoo will resume normal service in handling its own Gemini ads whereas Microsoft will take exclusive control of selling ads delivered by Bing, the search engine website unveiled by Microsoft in late-March 2009.

Our global partnership with Yahoo has benefited our shared customers over the past five years and I look forward to building on what we’ve already accomplished together,” said current Microsoft CEO Satya Nadella. “Our partnership with Yahoo is one example of the diverse partnerships we’ll continue to cultivate in order to have the greatest impact for our customers.”

Former Google search executive Ms Mayer was vocal of her dissatisfaction with the amended terms and has been busy bulking Yahoo search technology and ad revenue in areas Microsoft has no jurisdiction in. Her personal analysis argued the revenue per search for Yahoo has been worse under the Microsoft pact than when it handled web searches and advertisement schedules on its own. However, before the companies went into an agreement, their aggregate searches totaled 28%. Interestingly, their combined market share has notably increased to 32.6% for desktop searches in the US since February.

Microsoft and Yahoo plan to begin the transition of reallocating advertiser sales this summer. The process will be carried out by integrating sales lineup with the engineering team to “allow both companies to service advertisers more efficiently."

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