According to AllThingsD the MicroHoo search deal is nearing completion and “definitive agreement” status. Speculation that the deal was in trouble started happening when the two companies failed to meet their self-imposed October 27 deadline to finalize the complex agreement. However it appears the circumstances were just as reported in the parties’ 8-K filing with the US Securities & Exchange Commission:

The Letter Agreement specified that the parties would execute Definitive Agreements by October 27, 2009, but given the complex nature of the transaction, there remain some details to be finalized. The parties are working diligently on finalizing the agreements, have made good progress to date, and have agreed to execute the agreements as expeditiously as possible . . .

On the regulatory front AllThingsD reports that “several sources said, those government approvals are now nearing completion at the Justice Department, even though the Federal Trade Commission might still ask for more assurances on privacy issues related to online advertising and consumer data.” Europe must also approve the deal.

According to the most recent comScore search market share data, the combined reach of MicroHoo search would be 27.9% vs. Google’s 65.4%. Assuming the deal goes through up next for Microsoft would be a decision about whether to attempt to buy Ask, which IAC’s Barry Diller is open to selling, and whether to bid for AOL’s search-ad business when that deal comes up for renewal in 2010.

However a MicroHoo approval would potentially make a later Ask acquisition (or maybe even an AOL deal) harder because it would reduce the number of independent search engines in the market.

Yahoo just announced quarterly revenues of $1.575 million, which represents a 12 percent decline from the third quarter of 2008 and is basically flat vs last quarter. However the company saw a 19 percent decline in search ad revenue YoY but flat sequentially.

Yahoo CEO Carol Bartz characterized Q3 as “solid” in the press release and said that the business had “stabilized.” Here are the top-level financials:

Other revenue information from the release:

• Marketing services revenues were flat and fees revenues increased 2 percent,compared to the second quarter of 2009.
• Marketing services revenues from Owned and Operated sites were $851 million for the third quarter of 2009, a 15 percent decrease compared to $1,002 million for the same period of 2008. The decrease was primarily driven by a 19 percent decline in search advertising revenue and an 8 percent decline in display advertising revenue.
• Marketing services revenues from Affiliate sites were $526 million for the third quarter of 2009, a 6 percent decrease compared to $561 million for the same period in 2008.

Here are some of the slides from the associated presentation:

And now the call, with prepared remarks (by CFO Tim Morse):

CEO Carol Bartz “came down with something, nothing serious” but she’s not on the call. I’m disappointed.

Morse is going through his remarks in a monotone that is just washing over me. He made statements about search revenues being basically flat sequentially, though they’re down 19 percent vs. last year. He said queries are up slightly (I believe) vs. Q2.  I wish Carol were on the call . . .

Quick update on Microsoft:

We’re not out of search; we’ll continue to innovate and create a “better more personally relevant search experience” without spending on the “arms race.” Search is like an “Intel chip.” The differentiation isn’t at the chip level it’s in the user experience. (Not all that persuasive.)

We expect the deal to close/be approved in early 2010. He cites the letter of support from the American Association of Advertising Agencies from yesterday.

Assuming the deal closes  . . . Morse talks about the transition to the new platform for advertisers (non-substantive remarks). We have experience with Panama, etc., etc.

Q&A session:

Question re display revenues and trends and why is Google doing so much better in search?

Morse stumbles: “It’s tough to compare to Google.” This quarter’s only “down 1 percent, that feels like stabilization.” Queries are up.

Question re vulnerability of affiliate business and increasing TAC rates:

Morse: We know that Google monetizes better so we have to pay more. There’s a “make whole” provision if affiliates defect to Microsoft but not to Google.

There were a range of questions about Yahoo’s display business and future outlook.

Guaranteed placement was strong in the second and third quarters.

Question re margins and cost containment

Morse says that internal teams will control costs and will be rewarded by Yahoo for doing so.

Questions about ad quality on the Yahoo homepage

Among other things, Morse cites the Yahoo homepage relaunch and “acceptance” and “positive reviews.” Homepage growth was in the “double digits.”

Questions re the conclusion of paid inclusion

Morse said shutting down paid inclusion will improve “overall  marketplace” and wouldn’t speculate on direct impact on future revenues.

Question re metrics surrounding the new Yahoo homepage

Up strong “teens” in terms of page views. Not all the US users have switched yet. In eight countries total; fully rolled out in seven of them. Avoids talking about anything more specific. It’s still “early on.”  All the metrics I’ve seen are “quite favorable.”

Question on mobile monetization

Morse: mobile is a focus for our future growth. Reach is really improving. Huge leader in mobile with 35 million users in the US.

Question on search monetization: query growth up but RPS down, why?

All of search was down 1 percent QoQ. Flat sequentially. An awful lot that we’re doing to “invest in these businesses and make them better.” He rattles off search improvements (awkwardly). We’re not “falling down, we’re not falling down at all.”

Question re the branding campaign, why?

It’s very early to assess success of campaign. We definitely expect this to translate into more users over time. About “revitalizing the company.” About getting us to back to where we were. Over the last few years we’d underspent on the brand. We’re also using it as an internal catalyst too. It’s about us and our corporate identity. In the future it will become more product focused. It will become a more or less permanent part of our cost structure.

Bottom line:

Overall the mood on this call was in fairly stark contrast with the mood and outlook on the Google call. In contrast, to the “we’re back” tone there, Yahoo seems to be tentative, uncertain and struggling to maintain its position in display and search (notwithstanding some good news in display). All the talk about innovating in search around the user experience felt unconvincing.

Bartz would have been a somewhat more buoyant presence and been able to inspire more confidence.

Yahoo has announced that their paid inclusion program will cease at the end of this year. Partners were informed yesterday (such as here and here), and a Yahoo representative confirmed the move on a panel discussion moderated by Search Engine Land Editor-in-Chief Danny Sullivan at the iProspect/Range Online Media Client Summit today. We’ve also received a statement from Yahoo, which is posted below.

Yahoo wasn’t sure how they would handle paid inclusion when asked on the Yahoo/Microsoft press conference a few months back. Historically, there has been a lot of controversy over paid inclusion. Accepting money to be included in a free, unbiased, organic search index is a bit “hypocritical,” as former Ask.com CEO Jim Lanzone would say.

If you try to access Yahoo’s paid inclusion sales page you are redirected to advertising.yahoo.com. Both the “Search Submit Basic” program that charged an annual fee per URL and the “Search Submit Pro” cost-per-click program will end as of Dec. 31, 2009.

Yahoo has sent us a statement on this change:

We are committing our resources and efforts to our core areas of focus, including improving the search experience and relevancy of our ads to increase user engagement and ROI for advertisers, and as a result, have decided to exit Search Submit. We have stepped up innovation in Search Marketing, recently rolling out search retargeting, Rich Ads in Search and improved matching technology, and in Consumer Search, with enhancements like the new search results page. These enhancements deliver value, control, innovation and relevance to our advertisers, leading to increased ROI.

Yahoo! will exit Search Submit at the end of 2009. Yahoo! is providing those advertisers affected by the decision a sufficient lead time to assist in the transition. In addition, Yahoo! has recently announced a series of important enhancements to its Search advertising business and will work closely with many Search Submit advertisers to provide them with search solutions that will benefit their businesses.

This morning, many Yahoo advertisers received an email from Rust Consulting letting them know, they are included in a legal settlement over Yahoo search ads. The settlement web site, which is at inreyahoosettlement.com explains that the “lawsuit alleges that customers contracted for targeted ad placements through two products, “Sponsored Search” and “Content Match” (and predecessor products provided by Overture Services, Inc. and GoTo.com, Inc.) and that Yahoo! breached its contract with its customers by allowing Yahoo! ads to be displayed in spyware, domain name parking sites (bulk registration sites), pop-ups, pop-unders and typosquatting sites.”

Those eligible in the settlement get a refund of $20, whereas the lawyers get $4,170,000.00, plus reimbursement of expenses of approximately $100,000. You can see all the court documents over here and the email sent to eligible advertisers over here.

Finally, if you want to get your $20, you need to submit a claim online by March 22, 2010. If you are not happy with the $20, you can always sue Yahoo directly, but make sure to exclude yourself from this settlement by December 14, 2009.

The Yahoo Search Blog announced that BOSS developers can now add Yahoo Search ads in their search results. This will give developers a way to help monetize the BOSS applications they have built.

How do you get ads in your BOSS results? You have to apply for approval by one of Yahoo’s 3rd party syndication partners, Domain Development Corp (DDC). You can enroll at signup.ddc.com. This means Yahoo is not directly supporting the service or providing direct reporting, DDC will be doing that. Currently, DDC is the only one handling this for Yahoo.

Yahoo did make a point to say that this could change if and when the Yahoo-Microsoft deal works out. But until then, this is the way search ads in BOSS will be handled.

The Yahoo Search Marketing Blog announced the search ads displayed on Yahoo Search are now filtered based on the filtered sites you select on the left bar.

For example, here is a search for a product in Yahoo Search:

Notice all those ads? Well, when I filter the results to Amazon only, Yahoo only shows an Amazon ad:

The Yahoo Search Blog announced there are several features coming to Yahoo search ads, such as a desktop management tool, integrated rich ads, network bidding control and more. Specifically:

• Yahoo Search Marketing Desktop Tool, similar to Google’s desktop tool to manage AdWords, that will allow advertisers to manage their search campaigns offline. Trust me, this is a feature advertisers have been waiting for, for a long time. Want a preview? Ask your search representative or use this form.
• Integrated Rich Ads management for some advertisers later this month. That means advertisers can manage their rich search ads directly in the YSM console.
• Yahoo’s BOSS platform will “soon” let third-party developers syndicate Yahoo search on their sites, plus earn revenue by using BOSS.
• Network Distribution bidding control to allow advertisers to run ads on either Yahoo or its partner network, plus set bids separately for each distribution or channel.
• The search ad technology will continue to improve by “enhancements to our ad selection technology,” Yahoo said. They will also use previous queries to better refine the ads displayed to searchers.

Those are some of the key highlights of what is to come in the “future” at Yahoo Search Marketing.

The Yahoo Search Marketing Blog announced that your search ads will now automatically be displayed on iPhone & Android mobile phones. Yes, Yahoo said, this is an automatic opt in for all advertisers.

Yahoo said, “As of today, your ads should begin appearing immediately on these devices for relevant searches, if they have not already.” Yahoo boasted, if you didn’t have your ads on mobile devices, then “we’ve done it for you.” I assume there is an easy way to opt out, if you specifically do not want to show your ads on these devices?

Here is a picture of the ads:

There are also ads at the bottom of the search results.

For more information about mobile search ads from Yahoo go to searchmarketing.yahoo.com/mobile.

It’s time for an online advertisers bill of rights. So says Harvard assistant professor Ben Edelman, who has spent years researching Internet advertising and compares the current landscape to a “wild west.” Edelman recognizes the “staggering” opportunity that online advertising provides, but says the current system has problems that “threaten to destabilize online advertising—wasting advertisers’ budgets, slowing transition to online formats, and reducing payments to online publishers.”

In his just-published proposal, Edelman outlines five-point bill of rights for anyone advertising online:

1. An advertiser’s right to know where its ads are shown.
2. An advertiser’s right to meaningful, itemized billing.
3. An advertiser’s right to use its data as it sees fit.
4. An advertiser’s right to enjoy the fruits of its advertising campaigns.
5. An advertiser’s right to resolve disputes fairly and transparently.

Edelman uses Google’s advertising services and policies as examples throughout his proposal, sharing specific examples of practices that he says are harmful to advertisers. He says many of the “starkest problems” can be traced to Google’s online ad system:

“Google does not tell advertisers where their ads will be shown, omits itemized billing, limits how advertisers can use and transfer their own data, and insists on convoluted dispute resolution. Why such one-sided terms from Google?”

Edelman says he hopes his report leads to “improvements in at least the norms and expectations, if not the regulation, of online advertising.”

The Yahoo Search Marketing blog announced the new pricing changes are now in affect within the auction pricing model used by Yahoo Search Marketing. Overall, Yahoo said most advertisers should notice a decrease in their click spend.

Yahoo also announced a new report that shows which Yahoo partners are clicks are coming from and how well they are performing. The report is named the ad delivery report and can be used to determine which partners you should block from displaying your ads.

On the Microsoft front, adCenter has added a “Ad Preview” tool. The tool doesn’t just show you a preview of your ad, as it would appear on Bing.com, but also helps reduce “unnecessary impressions and accidental clicks.”

Here is a picture of the tool:

Finally, a blog post from the Rim Kaufman group, a large PPC agency, shared that overall, his average client is seeing a 6.7% growth in August in PPC share from the major three engines. So maybe all that ‘bing’ for Bing is paying off (sorry, I had to).