In a move we have been dreading for months, Yahoo has hired Internet search leader Google to sell some online ads in hopes of boosting its profit.
Yahoo also announced that its efforts to revive takeover talks with Microsoft is at a dead end.
Microsoft “unequivocally” said it isn’t interested in buying Yahoo
The partnership could last up to 10 years if it can win antitrust approval.
This is going to be another hotbed issue for domainers and something we are going to have to rely on the ICA to help prevent.
Big losers; Yahoo Shareholders, Carl Icahn, Microsoft, Domainers.
BIg Winner; Google
In trading today shares of Yahoo were down over 10%, Microsoft was up slightly as was Google
Not sure how Domainers are losers here.
David
Yahoo has said that if they came to a deal with Google they would basically outsource there PPC ads to Google as well.
There are many domains that perform much better on Yahoo parking partners than Google’s.
If this deal goes through looks like all domains will be parked through Google one way or the other meaning domainers revenue is going to drop.
Ah, you mean because of parking revenue.
Less than 5% of our revenue comes from parking and it didn’t cross my mind, but I agree this is not going to do wonders for parking revenue.
Couple of things…
1) I’ve seen it repeated on several blogs that Google is trying to “kill the domain channel”. I just don’t see this realistically happening. Is there any debate that type-in traffic is as targeted and high quality as there is out there. I would wager that someone who is motivated enough to type in “keyword.com” into the address bar is as interested in that keyword as one who’d type that same “keyword” into Google’s search. Direct navigation seems to be inherently part of human nature. I say that because the 15% of people that just type into the address bar seems to be pretty consistent if not increasing. Not only that but some of the people that actually use search engines just type in “keyword.com” anyway. I don’t know if Google will ever come up with a way to prevent people from doing it. I believe this is traffic that Google will never be able to monopolize and the main reason why Microsoft would be smart to buy up. Google using the domain channel is their only way of monetizing traffic they have absolutely no control over. No matter how much Google “hates” the domain channel, it would be the proverbial throwing the baby out with the bath water if they ever tried to cut it out.
2) I agree with David. If Yahoo makes more per search using Google, then IN THEORY, the amount that gets filtered down to the domainer should also increase. I don’t buy the logic that Google domain feeds pay less. Could it be a misperception created by parking companies that take a bigger share than they should that use Google? Regardless, the logic does not make much sense to me.
3) If Microsoft is allowed to own 90% of the OS software in the world, then why is Google not allowed to own the same % of internet search (assuming they bought Yahoo)?
Interesting News google & yahoo
Tony & David
I will tell you that we have domains that make 10x more on Yahoo than Google and domains that make 10X more on Google than Yahoo.
However when we place our traffic with basically two providers and now we lose 1/2 of them and are down to one, it is not good for anyone who parks domains.
Once again if parking revenues decline, again dramatically, domain prices and values will not be far behind.
I think it is in everyone interest to oppose the deal and hope that through the work of the ICA and other that the deal gets rejected either by the Justice Department or the Eu
In addition to Mike’s point that some names pay far more with a Yahoo feed than Google (and visa versa), is that the higher the percentage of paid search Google gains, the greater their pricing control (i.e. how much they pay the parking companies and therefor us) only grows stronger.
Do we really want Google to become the Microsoft of search?
TechCrunch has the complete agreement terms and conditions:
http://www.techcrunch.com/2008/06/13/googles-83-million-escape-clause-sec-filing-spells-out-details-of-yahoo-google-deal/#more-18872
Steve
Exactly, with no other competition when contracts come up for renewal with Google, Parking companies are not going to get offer 70% and above anymore, they are going to get whatever Google wants to offer, be it 50%, 33% or whatever.
This is as serious an attack on the domainer industry and you can get.
First everyone needs to understand the big picture, what is at stake, then we need to get more support to the ICA and make our voices heard in the governmental bodies that will be holding hearings and looking at whether to approve the deal, including the EU
Competition is good and while we’ve all been waiting for MSFT to become a legit #3 PPC option to Google and Yahoo, (so we all have better negotiating positions), now we’re down to only one option.
It seems that everyone’s negotiating power dissapears when one domainnat player can say “take it or leave it” — whether it be a parking company, or online advertiser. A travel advertiser could play off differences in bid values for the term “airline tickets” and move budget between goog & yahoo bsed on each’s pricing, conversion etc. now it’s simply load your google campaigns and take whatever results come your way.
Competition is healthy and this deal effectively kills much of the that in the online PPC space.
Mike,
Please correct me if I am wrong. The jist of this deal is that Yahoo will be using some of Google’s ads for some of its searches because Google’s ads are more revelant and have a higher PPC value (more advertisers use Google, more competition means higher ad bids). Essentially, this allows Yahoo to make more per search since the click rate will increase (from the higher relevance of Google’s ads) and more revenue per ad clicked. This deal does not supercede or change Yahoo’s existing revenue share agreements that it has with its partnering domain parking companies. If Google were acquiring Yahoo, I can understand all the concern. But this deal just results in more revenue for Yahoo and assuming the revenue share agreements with the parking companies remain unchanged, more money will go to domainers as well.
want unlimited choices? Develop your domains 🙂
Mike, will you indicate to your readers which parking companies use Google and which parking companies use Yahoo?
thanks, Ed – Michigan
Michael,
Perhaps it is time to consider developing the good domains into content rich sites, get ranked and monetize?
I suspect you’d make more money than parking.
-Richard.
Tony
I think they structured the deal in such a way that it has the best chance of passing regulatory muster.
So its a “non-exclusive deal” and they can use Google for 1%-100% of their traffic and search terms.
My guess is they did not do this deal to do a small percentage of their own traffic or PPC traffic.
I think you will see much of the PPC traffic going to Google, leaving only one PPC provider in the world
Bahamas
Developing domains is all fine and dandy but your talking about a limited amount of domains each year.
You can’t develop thousands and tens of thousands of domain each year.
Ed
At the moment to our knowledge more parking companies use Yahoo feeds than Google feeds to monetize their domains because Yahoo performs better overall.
Let’s not forget that Skenzo switched recently from Google to Yahoo and Name Media, when it bought Smart Names, which was then a Yahoo partner, switched to Google then back to Yahoo.
If you could only pick one Yahoo is the one, although many domain perform better on Google.
Current Yahoo Partners include:
Trafficz
Skenzo
Premium Traffic
Marchex
Hit Farm
Parked
Name Media
(frank)
Current Google partners are:
Domain Sponsor
Sedo
Readers feel free to add any we did not include on either side of the ledger
Also the deal is obviously bad for advertisers.
Having only one choice, for Pay Per Click advertising will costs advertisers plenty in the long term.
We are now back to the days of the old “Ma Bell”
One company that controls and entire industry.
Let’s also not forget that Google also owns doubleclick now, which is the number 1 online ad agency for other than Pay Per Click Advertising and also Youtube.com which is the number 1 site for online videos and positioned to be the number 1 designation for online video advertising.
On second though, sell all your domains and buy stock in Google.