Yahoo Partners Google For A Display Ad Deal


Yahoo has inked a non-exclusive global ad deal with Google to display contextual ads on its properties. Contextual Ads are display ads which are related to the text featured on a website and are placed on the same page.

While the financial details of the partnership were not disclosed, Yahoo said that it will be displaying ads on various Yahoo! properties and certain co-branded sites using Google’s AdSense and AdMob services, however the company mentioned that Google will be just one of its contextual ads partners.

Why is this important? We believe that this deal will be beneficial for both the companies. It will enable Google to show highly targeted and contextual ads to Yahoo’s huge user base while Yahoo might be able to improve its display ad sales revenue through this partnership. Remember that Yahoo had reported a 10% year-on-year decline in its ad sales and a decline in its display ad revenues in the previous quarter.

In September 2012, Yahoo had inked a similar contextual ad deal with Media.net, a Directi venture, to launch Yahoo Bing Network Contextual Ads powered by Media.net. As part of the deal, publishers could use Media.net to create and customize ad units that display relevant text ads from across the Yahoo! Bing Network, however it was limited only to websites having premium content and received a majority of its traffic from the United States, Canada or United Kingdom.

Last February, we had also heard that Yahoo was planning to launch a publisher ad network in India, however we haven’t heard any official response from the company yet.

Strangely, Yahoo had also inked agreements with Microsoft and AOL in November 2011, to offer each other’s premium non-reserved online display advertising inventory to their advertising customers in a bid to counter the growing dominance of Google and Facebook in display advertising.

Search deal? While the company has mentioned that Google will be just one of its contextual ads partners, it would be interesting to see if this partnership will extend to search results as well in the future. Yahoo previously had a search deal with Google before opting for a 10-year search deal with Microsoft in July 2009. However, Yahoo CEO and an Ex-Googler Mayer is apparently not happy with how this deal has worked out for Yahoo, as indicated by an AllThingsD report.

Last month, Yahoo had reported search revenues excluding traffic acquisition costs of $427.2 million for the quarter.  Yahoo CFO Kenneth Goldman had stated that this revenue was the highest quarterly search revenue ex-TAC reported by Yahoo since Q3 2010, which was prior to Yahoo’s 12% revenue share partnership with Microsoft.