Yahoo & Google Strike Search Ad Pact

In the midst of several high profile talent departures and falling short of Q3 revenue expectations, Yahoo announced today that they have signed a non-exclusive search ad deal with Google.

While not separating itself completely from Bing (who still provides organic search as well as many paid results for the company), the Yahoo and Google search ad deal will enable Yahoo to choose who gets to show advertisements on any given query. 

The Yahoo/Bing paid search agreement, resigned back in April, remains intact as of now. As part of this revised deal, Bing gets a minimum of 51% of the search queries on desktop; meaning, Yahoo can serve 49% of desktop ads from either their own Gemini platform—or, now, from Google. The updated search agreement with Bing doesn’t specify any such minimums on mobile, however; therefore, its entirely possible that Gemini/Google ads will some day make up 100% of Yahoo’s mobile inventory.

As expected, two areas of the world not covered by this Yahoo/Google search ad deal are Europe and India, where Google is currently facing anti-trust battles. North & South America, numerous Asian nations, and Australia & New Zealand are specifically outlined as countries where Yahoo can choose to show Google paid search results.

Google and Yahoo, of course, have some history in this area. Before 2004 (around the time I got into PPC myself), Google actually provided all of the advertising on Yahoo search. After taking paid search in-house with Yahoo Panama, the two companies again tried to unite for an ads agreement—one that was nixed by the DoJ before it ever began. No word yet on what regulators will have to say about this latest arrangement.

The payment terms of this Yahoo and Google search deal were not disclosed. Yahoo will receive a percentage of revenue from Google PPC ads, but no number has been given. The current arrangement is good for three years—though, either company has the ability to opt-out for reasons not specifically referenced. Google AdWords advertisers will have access to Yahoo inventory through the Search Partners network (similar to Aol and other partner networks).