The Marriage of Microsoft and Yahoo

Yahoo and Microsoft are joining forces and their partnership will breed big changes in search, especially for the adult space. Officially, the two recent allies are calling their union the Yahoo-Microsoft Search Alliance.

Unofficially, these strange new bedfellows are concocting a brand new landscape for adult content in organic and paid search. You need to know the skinny on what the new scenery will look like.

First, some background to put things into context. In late July last year, the two companies announced their engagement. Microsoft will power Yahoo search and Yahoo will be the sales and support guys. The intent is, together, they can develop into a meaningful competitor to Google. Carol Bartz, CEO of Yahoo, commented, “This agreement comes with boatloads of value for Yahoo, our users, and the industry. And I believe it establishes the foundation for a new era of Internet innovation and development.” A new era? Perhaps.

Steve Ballmer, CEO of Microsoft, had this to say, “Through this agreement with Yahoo, we will create more innovation in search, better value for advertisers, and real consumer choice in a market currently dominated by a single company.” Ballmer is making it no secret he’s gunning for Google. And he’s correct inasmuch as the search alliance creates a viable paid search alternative to Google that reaches about 30 percent of the market.

Four and a half months later, in December 2009, the companies issued a joint press release stating their agreement was finalized. They had a deal. What they didn’t have was the U.S. Justice Department and European Commission approval. That took another 2 months. DOJ approval was announced On Feb. 18, 2010. The engagement was over. Yahoo and Microsoft were officially married, and it’s been full steam ahead to implement the agreement ever since.

Considering the lack of ballyhoo in the press, it’s no surprise how few people have been giving the matter their attention or considering the consequences of the search alliance on their search engine traffic. Let’s examine what’s going to happen, first with the organic traffic and then with paid search.

Forget about Yahoo Start searching Bing for your important keywords because in very short order Bing’s results will be Yahoo’s results. In fact, they already are. On July 20, Microsoft announced in their advertiser’s blog, “In mid-July, we began testing the delivery of organic results from Bing to Yahoo Search, which may gradually increase to up to 25 percent of Yahoo Search traffic”. Holy crap! Err, I mean, Golly! That’s 25 percent right now. With Wall Street quietly watching, and stock prices hanging in the balance, it’s easy to imagine the two CEOs are pushing hard to implement tout suite. If the test goes well, Yahoo could flip the switch on algo results in August.

For years most SEO folks have concerned themselves with affecting results solely in Google. An understandable strategy, since Google commands 70 percent of the search footprint and the other 30 percent is fragmented across Yahoo, Bing, Ask, and a slather of also-rans. More trouble than it’s worth optimizing for that motley crew. But the search alliance changes things. Yahoo plus Bing represent about 25 percent of the search market today and if you drink the Microsoft Kool Aid, it could rise to 3 percent. Suddenly, Bing is a piece of the pie worth optimizing for.

If you are ranking well in Bing, you’re OK for now. If you’re not, that’s a problem. Either way, you should be familiar with the Bing SEO basics. To find out more, you can rummage through Bing’s official set of Webmaster Tools, recently updated on July 21. Also, SEO Moz has published a primer on how Bing and Google rank pages differently. Both are worth a read.

Let’s talk about paid search. It’s thorny topic. Microsoft’s paid search platform is called AdCenter. Their policy on advertising adult content has been a single resounding word: No (way Jose)! Yahoo’s paid search platform is called Sponsored Search. Yahoo accepts adult advertising. Many of you gentle readers may already advertise in, or at least be familiar with Yahoo’s Sponsored Search.

To be blunt, the search alliance turfs Sponsor Search. AdCenter replaces it. AdCenter ads will display on Yahoo and Bing. Sponsored Search ads die. So how do adult advertisers in Yahoo get their ads into AdCenter when Microsoft’s policy on adult is “NO”? The short answer is they can’t right now. But Microsoft has been modifying AdCenter to accept adult content and the doors will open to the public presently. If you are a Yahoo Preferred Direct Advertiser (PDA), meaning you spend $25,000 a month or more with Yahoo, your account manager will assist you in porting your Sponsored Search campaigns to AdCenter. If you’re not, be prepared to be on your own with the transition.

The transition will be problematic, even for the PDAs. Most troubling is Microsoft has no experience with adult advertisers and even though account management will persist with Yahoo, policy and enforcement will be with Microsoft. Microsoft has published their new joint adult editorial guidelines that are similar to Yahoo’s with a few notable exceptions. Watch out for content implying non-consent of any kind. The new guidelines disallow it. Affected genres include spy cams, voyeur, girlfriend revenge, and dating sites marketing to cheating and affairs. It’s still a moving target, however. Policy is likely to be volatile and inconsistently enforced for quite a while.

Another crucial difference is how AdCenter manages the search terms adult advertisers can bid on. First, there’s “the list.” Yahoo maintains a list of “unambiguously adult” keywords. If it’s on the list, you can bid on it. If it’s not on the list, you can’t. AdCenter has a list too and it’s not as big as Yahoo’s. Do you think size matters? Secondly, even if AdCenter adopts Yahoo’s list verbatim, there’s still a problem. Yahoo’s list is canonical. That means they store multi-word terms in alphabetical order, but the order of the words doesn’t matter for matching purposes. For example the term “xxx web cam” is stored canonically as “cam web xxx,” and any combination of the words matches the stored phrase. So “cam web xxx,” “web xxx cam”, “xxx web cam,” and so on, are all biddable. Plurals also match, so “xxx web cams” is OK. AdCenter doesn’t support canonical phrases. Every combination of multi-word terms, including plurals, would have to be included in AdCenter’s list for it to match Yahoo’s. AdCenter’s list seems even smaller. Third, AdCenter allows only “exact” match types on adult keywords. Yahoo offers “advanced matching.” Simply put this means, again, there are fewer keywords that will serve ads in AdCenter than in Yahoo If we do a thought experiment on porting a campaign that’s running in Sponsored Search over to AdCenter, based on the differences between the two engines’ adult keyword lists alone, it’s easy to surmise that the ported campaign will not receive as many ad impressions on the new platform as it did on the old.

In spite of the teething pains we’re expecting with the transition, the prognosis for adult search is good. It’s an exciting prospect to have one engine with 25-35 percent of the search market to work with. Google’s domination of search has driven PPC prices up to the point where break even is the new up. The search alliance promises to provide a PPC marketplace where prices are low, traffic volume is adequate, and the time it takes to manage one’s campaigns is worthwhile.

It’s clear both Microsoft and Yahoo are committed to making their marriage work. They probably won’t admit it openly, but adult advertisers are important to them. So creating an environment where adult advertisers can have a good experience is an important piece to their marital bliss.

Expect choppy waters at first, but there’s bound to be smooth sailing ahead.


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