It seems a large part of the reason that Yahoo!'s stock recently tanked was the market was punishing them for delaying their ad system.
I know factoring clickthrough rates into ad costs will help optimize their revenue stream, but does anyone think the new system will help them catch Google on the monetization front?
I don't. The three main reasons are
- They are losing marketshare daily. Google has a stronger search technology and search related brand, and the next version of IE is going to integrate search into the browser. Even if MSN loses most of the associated browser distribution deals they will still drive up the traffic acquisition costs for those who win them, and since Yahoo! has a less efficient marketplace than Google they are not going to be able to outbid Google.
- Google is already busy taxing noise out of their ad network when Yahoo! is just fighting to keep up with pricing, let alone creating easy account management tools.
- Yahoo! is more cautious with trademark protection in search ads. Since branded terms are some of the highest converting and most valuable terms that choice probably costs them a fat packet of cash.
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