Yahoo Search Marketing, also known as Overture, is scrapping the strict bid-for-placement system it invented.
When Yahoo rolls out its updated search advertising system later this year, the highest bidder will no longer be guaranteed to show up at the top. Yahoo is switching to a system similar to Google and MSN, that takes into consideration both the bid amount and click-through rate of the ads. This should help with relevance while boosting Yahoo’s revenue.
Yahoo Search Marketing pioneered the entire pay-per-click search engine market when it originally launched as GoTo in the 90s. Google stole the concept but made it much better. (Google paid Yahoo a nice sum of cash to settle patent infringement suits).
Changes at Yahoo are closely watched by the domaining community. Most paid parking services use Google as the ad provider, but many (including Parked.com and Dotzup) use Yahoo. The general consensus is that Yahoo delivers a higher bid per click but lower click through rate. Hopefully Yahoo’s new system will focus more on how users interact with ads than how Yahoo editors view them. Google’s system lets users decide what’s relevant, whereas Yahoo employees a team of editors to determine what’s relevant. The wisdom of the masses always prevails.
[tags]Yahoo, Google, Adsense, Domain Names[/tags]
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