Google Inc (GOOG) Signs Global Advertising Deal with Yahoo! Inc. (YHOO)

At this point in time Yahoo! is already showing Bing contextual ads on their web properties, due to the deal the closed last year with Bing and Media.net, resurrecting their Publisher Network.

I don’t know the exact performance of Bing’s contextual ads, but when compare the effectiveness of Bing’s search engine ads and Google ads, it’s again Google that “wins” this battle, meaning more pressure and challenges for Microsoft’s online business. If Yahoo! sees a better return per web property through Google than through Bing served ads, Microsoft could end up on its own again.

This won’t be a good scenario as Microsoft invested billions in its search initiatives to gain momentum in the sector. Critical mass is what Google has in relation to search queries, and now gets extra visibility through the Yahoo! network and what Yahoo! has with content platforms. Microsoft keeps on innovating and experimenting, and Bing needs to keep innovating in niches where they have advantages over Google and Yahoo!

Yahoo! made a smart move by partnering with Google and allowing that company to excel in what it does best. This way Yahoo! can focus even more on the content whilst Google can show Yahoo! what their algorithm is worth.

All-in all this is a very interesting development that will create additional pressure and challenges for Microsoft.

The article Google Signs Global Advertising Deal with Yahoo! originally appeared on Fool.com and is written by Gianluigi Cuccureddu.

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