After a flurry of deal-making over the last few days, Google and Yahoo, two giants of the online advertising business, are set to encroach on each other’s turf even more aggressively than before.
On 16 April, Yahoo announced a deal with publishers representing 264 newspapers to sell national advertisements across their websites. It may be the clearest sign to date of the company's efforts to extend its advertising platform beyond the panoply of Yahoo sites.
The move follows Google's 13 April announcement of its plans to acquire DoubleClick for $3.1 billion (Rs13,020 crore), a bold move into the market to deliver display and graphical advertising to websites. It is a business that Yahoo dominates, and one in which Google—the leader in search-based text advertisements—has failed to gain much traction.
"They are both trying to extend their influence and business opportunities beyond their own properties," said Stewart Barry, an analyst at ThinkEquity Partners.
Yahoo's deal with newspapers is an extension of an agreement announced in November with a smaller group of publishers. It also represents a vote of confidence for Yahoo's revamped search advertising technology, which the company unveiled earlier this year.
Under the deal, newspapers will use Yahoo's search technology on their websites and share revenue generated from the ads that Yahoo places alongside search results. Both Yahoo officials and outsiders have said recently that the technology, referred to internally as Project Panama, has improved Yahoo's ability to place relevant ads in front of users, and therefore generate more revenue from searchadvertising.
Additionally, newspapers will be able to sell local advertisements on certain Yahoo properties, and their articles will appear on Yahoo's news, finance and sports websites.
Those newspapers in the consortium that currently use DoubleClick's technology to deliver graphical ads on their sites will gradually move to Yahoo's system. In recent months, members of the newspaper consortium, which initially included MediaNews Group, Belo and E.W. Scripps, have recruited other chains, including the McClatchy Co. and Media General. They are hoping that the broader alliance with Yahoo will help struggling newspaper firms increase online revenues. NYT