Apr 10, 2008 : Yahoo to Display Google Ads

📅 April 10, 2008 - Yahoo (yahoo.com) announced yesterday that it will begin a test of Google's AdSense for Search service (google.com/adsense), which will display Google-brokered ads alongside Yahoo search results.


Yahoo says the test will only be performed in the United States, and will last for no more than two weeks and affect no more than three percent of all Yahoo search queries. It will only affect Yahoo.com and not any of the company's affiliate websites.

The news, which was leaked by The Wall Street Journal early Wednesday, is part of Yahoo's ongoing effort to "boost Yahoo's leverage in its ongoing takeover standoff with Microsoft". This strategy was later confirmed by Yahoo's press release, despite the fact that Microsoft was not mentioned by name.

"As previously announced, Yahoo!'s board of directors is exploring strategic alternatives to maximize stockholder value, including exploration of potential commercial business arrangements," the company said in its press release. "The company noted that the testing does not necessarily mean that Yahoo! will join the AdSense for Search program or that any further commercial relationship with Google will result."

Microsoft made a $44.6 billion bid for Yahoo on February 1, and this past Monday, Microsoft CEO Steve Ballmer threatened a proxy fight if the search engine does not accept the offer within three weeks.

Yahoo introduced its own take on AdSense last year with the launch of Panama search advertising engine. The initiative has been less than successful, generating significantly fewer dollars per search query than AdSense.

The Journal's sources say that even before the Microsoft bid, Yahoo was negotiating with Google regarding search advertising in Europe. Google has questioned whether a Microsoft-Yahoo partnership would actually hinder market competition, while the same could be said about the Yahoo-Google partnership.

Microsoft released this statement on Tuesday:

"Any definitive agreement between Yahoo! and Google would consolidate over 90 percent of the search advertising market in Google's hands. This would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo! We will assess closely all of our options. Our proposal remains the only alternative put forward that offers Yahoo! shareholders full and fair value for their shares, gives every shareholder a vote on the future of the company, and enhances choice for content creators, advertisers, and consumers."