Yahoo Partnership That Makes Sense: A Google

How can Yahoo team up with Google? Think international.

News notes suggest Yahoo’s two week trial running Google ads is going very well. So well, in fact, that the firms are discussing expanding the relationship. That news ought to scare anyone in the domain name industry and any publisher that uses Google Adsense. If Yahoo exits the stage, look for payout percentages to decrease.

But there is one partnership deal Yahoo (YHOO) and Google (GOOG) could strike that would benefit advertising partners: an international deal. The basis for Yahoo’s weak international pay-per-click standing is historical. GoTo (the original incarnation of Yahoo’s search marketing platform) started in the U.S. When it expanded to other countries, advertisers had to create fresh accounts in those countries. Google learned from GoTo’s experience and created a unified international platform. It also serves ads in many more countries than Yahoo does since only one account was necessary.

There used to a be a work around for Yahoo-based parking firms such as Parked.com. They were able to get a Google feed through Ask.com to run ads for countries that Yahoo didn’t support. But that went away last month. Although it depends on your portfolio, losing the ability to serve ads to some of these international destinations can shave 20% off domain parkers’ bottom lines. (Parked.com lets you send this traffic to a different domain parking firm if it can’t monetize it.)

So as detrimental as a full outsourcing of paid search to Google would be, there is a partnership that will help Yahoo, Google, and their advertising partners alike: an international partnership.