• http://roshanjoshi.com.np Roshan Joshi

    Yahoo + MSN was never in the search game once Google started to rise. they should come up with new market instead of focusing on search ad revenues.

  • http://www.reubenyau.com Reuben Yau


    Don’t forget that the paid inclusion program took a tumble during 2009 and was eventually shut down in that Q4.


  • http://www.rimmkaufman.com/rkgblog Mark Ballard

    Great analysis and insights Danny! I completely agree that it’s a little audacious for Yahoo to be throwing Microsoft under the bus when it was Yahoo’s responsibility to accurately assess the potential impact of the Alliance.

    Still, it does appear that Bing’s ad serving is hurting Yahoo. For one, Bing is far more restrictive than Yahoo was in it’s matching of keywords to queries, which would go a long way towards explaining the “disappointing” RPS figures.

    Also, we’ve found a significant decline in Bing and Yahoo’s combined search partner traffic since the Alliance. It doesn’t look like this is a few big players leaving the fold, but more of an across the board decline. With partner traffic making up nearly half of Yahoo’s pre-Alliance paid clicks this has also clearly had a major impact.

    Our most recent analysis is here: http://www.rimmkaufman.com/rkgblog/2011/04/19/bings-broad-match-problem


  • http://roadmapintegrity.com Bill Bliss

    Awesome analysis Danny, as usual. I also enjoyed your forensic dissection from yesterday’s earnings analysis.

    One question you raised above was “For my part, I’m pretty dumbfounded. You’d think Yahoo would have been fully confident that Microsoft’s ads would outperform what it was doing itself before transitioning. Otherwise, it made little sense to do the deal in the first place.”

    I’m guessing that whatever concerns Yahoo might have had regarding AdCenter’s performance, both in absolute terms or relative to AdWords or Panama, Microsoft explained them away by talking about “scale.” You reported on this too, but I found a pretty detailed breakdown here: http://www.eweek.com/c/a/Search-Engines/Microsoft-and-Yahoo-Whats-Scale-Got-to-Do-With-It-893001/.

    Microsoft was convinced that all they needed to turn the corner – in terms of share, relevance, and revenue per query – was scale. Whether Yahoo believed it too or whether they rationalized it away at the time, I’m pretty sure the word “scale” was used repeatedly.

    Whether that argument was persuasive or not is probably irrelevant – the motivation to eliminate millions in costs and move almost all the revenue to the top line was almost certainly 99% of the motivation behind the decision. The fact that they are now conveniently ignoring what must be lowering search and ads opex and capex to almost zero while throwing Microsoft under the bus for AdCenter performance – one of the main points of your post – must raising blood pressure in Redmond…

  • http://www.michael-martinez.com/ Michael Martinez

    Dear DOJ: I told you so….

  • http://admarketplace.com Avi Slavin

    Great analysis. Also worth noting that Yahoo has cut its search syndication spend (TAC) by 76% from Q3’10 to Q1’11. That’s $1.2 B on an annualized basis.

    For more on this aspect of the story, go to: http://admarketplace.com/industry-report.php

    Avi Slavin

  • Divy@ T@ndon


    I have a solution to this, listen yahoo and bing owners start hiring google search people, like facebook did. Pay them higher salaries, give them extra facilities.
    I am sure you will make awesome revenues out of search once you do so.


  • http://www.clixmarketing.com szetela

    Danny – you nailed it – watch for a Mediapost article on the same topic today or tomorrow.

  • Neil K

    Great article. Thanks so much.

  • http://www.intelius.com sundgren

    Two thoughts here Danny (great synopsis BTW)

    1) 2+1=2 since BingHoo! launched, we are an 8 figure spender and I have personally spoken with a dozen others as big or larger than us and they all agree volume is not there, the CPA’s look great, volume is sucking it.

    2) I can fix all these problems. Take the Adcenter advertiser platform, reverse engineer the Google Adwords platform in its entirety, replace the Google Adwords Logo in the top left with the AdCenter logo and let us spend some real money! (oh yeah and also “loosen up” the bing algo, it is suppressing the volume artificially.

  • Greg Haslam

    Danny this article was a cathartic read for someone who has lived through the trials and frustrations that this switchover has caused and in some aspects is still causing.

    One point I would make is that the Yahoo! Account Reps who still handle the large advertiser accounts do make a valiant effort to help aid advertisers , but more testing and investigation was definitely needed going into this before they pulled the trigger.

  • http://www.motivationalblog.net/ tarunkumarr

    Salute you buddy, Very Helpful post to understand search engine revenue stream…thnx