Yahoo Dips Toes Into Alphabet Soup With Google Partnership

By November 5, 2015No Comments

By Ilya Cherepakhin

295x175_YahoogleWhat a difference six months makes in the search business.

Back in April, we noted the complexities the industry faced in the wake of the ending of Yahoo and Bing’s exclusivity agreement. Now, with the news that Yahoo is partnering with Google, it’s time to take stock of this pairing of the oldest rivals in the digital space.

Call it a reunion of Yahoo chief Marissa Mayer and her former employer, which is now part of the Alphabet soup that contains Google and other business entities. Or a second act, recalling Yahoo’s attempt to link with Google back in 2008, a would-be marriage annulled by the Justice Department.

Needless to say, with plenty of financial incentives to improve its profitability, as well as the need to reduce the costs of its growing search operation over the years—along with pressure from advertisers to deliver better performance—Yahoo has plenty of reasons to step up its search game.

So what does the new Yahoo-Google relationship have in store? We thought it would be valuable to analyze who the biggest potential winners will be. Besides Yahoo’s and Google parent Alphabet’s investors, they include users, paid search advertisers, and industry SEO and PPC practitioners.

Not surprisingly, investors in both companies will see benefits, with Yahoo’s being the biggest winners overall. For starters, better monetization of search results means more revenue coming through. However, the biggest potential win is on the cost side for Yahoo Inc. By outsourcing more of its search operation, the company is reducing the expense of one of its largest areas of overhead. The priciest parts of operating a search engine are the crawling, indexing, sorting, ranking and selecting which terms and content to serve up to users. By linking with Google, Yahoo not only gains a partner to backfill where its coverage is underrepresented but also someone who can effectively keep up with future growth.

Yahoo Search Users should see some short-term benefits.

  • Pro: Better experience with Google’s arguably better results
  • Issue: The benefit above may be hindered by the current layout and structure of Yahoo’s results page, which differs from Google’s and creates a different user experience.

PPC advertisers, while seeing some gains, will be up against limitations of optimizing Google PPC traffic appearing on Yahoo.

  • Pros: Better response rates on PPC ads. Improved search results should lead to enhanced engagement.
  • Issues: More competition on Yahoo sponsored results. Advertisers that were previously only on Google will now start appearing on Yahoo.
  • Transparency in campaign analytics will be key to effectively optimizing Google PPC traffic that is going to Yahoo.
  • Advertisers already on Yahoo could start competing against themselves as their Yahoo ads are pitted against those from Google. The scale of the partnership will ultimately determine if the growth in exposure outweighs limitations of managing this new type of PPC traffic.

SEO practitioners perhaps will see the least change. For a while now, most webmasters have been using conventions that apply to all engines instead of taking steps specific to any one engine. Thus, from an SEO perspective (at least for now) it is business as usual, with no meaningful benefits or issues. That being said, Yahoo is still controlling how Google results are being selected and presented on its results pages. Thus, even if with a potentially heavy Google flavor, users would still have in the short run a distinct Google and Yahoo experience, with engine rankings and user experience being quite different. For a range of queries, especially among local searches, the look and feel of Yahoo’s and Google’s results are quite different (let alone the results themselves) as we see in the example below for “best restaurants in NYC”.

However, if the Google-Yahoo partnership proves beneficial to Yahoo and its users, Yahoo may be encouraged to roll out Google integration on a greater scale. This could entail mimicking its search results layout to be closer to Google’s and perhaps extending it to shopping results.

Despite retail being one of the most popular verticals, the new partnership does not cover that, as it is limited to standard paid and organic search. Could the fate of Yahoo Shopping be the next milestone in the continuing saga of Yahoo’s search efforts?

IlyaAcro400x400Ilya Cherepakhin is one of our most experienced Paid Search Directors, being in the industry over a decade and heading SEM strategy for leading industry brands while at large agencies like Neo@Ogilvy and the Publicis group. Ilya has extensive background with clients in the home goods and services space particularly with clients looking to leverage strategic elements of Paid Search without necessarily having on-site e-commerce capabilities.

His past project work included lead generation efforts to assess impact of Paid Search on offline channels, managing coop campaigns and leading analytics engagements to help determine and set up campaign KPIs. While most passionate about Paid Search, Ilya has a keen interest in multi-channel marketing particularly when it comes to creating synergies between online and offline channels.