I saw this article today in Reuters titled Yahoo to Compete with Bing Despite Microsoft Deal and I'm pretty much confused. It was only a short time ago that Yahoo made a deal with Microsoft which caused Yahoo's Carol Bartz to declare "we have never been a search company." Now the company that was supposedly never a search company will be doing the following:
- Will collaborate on the back-end but we are competitors on the front-end
- Microsoft will license Yahoo's search technology, allowing it to integrate certain aspects of it into Bing. Microsoft's advertising search product, AdCenter, will also replace Yahoo's equivalent product, Panama.
- Microsoft sends ads along with its answers to queries, Yahoo may or may not use all of them, depending on a complex formula.
OK so I guess the company not doing search will license the "smarts" behind the search and the ad buying platform, but then Yahoo will decide which ads are more relevant to the actual search? Confused? Me too, but it does remind me of AOL and Ask.com arrangement with Google.
You can go direct to Ask.com and buy from them or you can rely on Google to show your ads in Ask.com's results. This gives Ask the ability to slot direct advertisers first, but to me this arrangement seems suboptimal for Yahoo.
Sure they can slot other people and use their sales team to sell cross product deals which keeps them in the game, but the only way I see Yahoo's ability to scale across the long tail of advertisers is to "subcontract out" all of the other search advertisers to Bing.
I get that, but why all the hoopla around the Bing deal? Why announce you were never a search company? Why say you are now in the game when giving up the technology aspect of search and the long tail of advertisers to Bing? Seems like the Yahoo ship is rudderless to me.