Pondering Binghoo (Predicting the Future of Yahoo! and Bing, Part II)

Posted on Thursday, July 30th, 2009 by Print This Post Print This Post

Categories - Featured, SEM, SEO

A day after the official announcement, we’ve gathered even more reaction to “the deal.”  If you missed part I, with insight and opinions from seven of our most trusted Search Agents, check it out here. Aaron Dodez | Senior Director, Search Marketing:  “Bing generally converts very well for our advertisers, the issue has always been finding more traffic.  This potentially solves that.  What remains to be seen though, is if even with Bing’s more relevant algorithm showing ads on Yahoo, whether the conversion rates will be better for Yahoo traffic.  Maybe it’s the MSN user that causes the (sometimes) higher conversion rates?  Maybe it’s a function of Yahoo’s user base combined with their matching technology that shows lower conversion rates for some clients.  That’s an open question.  I think the deal benefits the advertiser because it will be much easier to go after the vast majority of internet searchers.  And our Yahoo service teams have been by and large pretty solid – though rotated in and out often.  Definitely potentially positive but I’m in wait and see mode.” Ted Ives | Vice President of Product Management:  “It’s all about the Ph.D’s and the datacenters.  While Yahoo debated about its future, Microsoft, in addition to building out lots of datacenter capacity, grabbed FAST and every semantic search startup it could find; if you look at the valuations they paid, it becomes clear they didn’t buy any of these for revenue; the valuations typically amounted to about 3x the salary of the Ph.Ds at each company.  Just as the graphic chip industry ended up with two Ph.D-sinks called Nvidia and Xbox, the Search industry now has two Ph.D sinks – Google and Bing.  So search is now a two-horse race with two massive barriers to entry – critical mass of datacenter resources and critical mass of Ph.Ds.  The only company that can break through the datacenter resource barrier is Amazon with its S3 services – so some startups may still have a chance via that route.  As far as the Ph.Ds go - they’re the ultimate secret sauce and will be hard to come by for many years until Google and Bing are no longer fun places to work at…so expect only two horses in this race for a very long time!” Frank Lee | SVP, Client Services:  “MSN had better technology and should gain more momentum with the added Yahoo! traffic.  If AdCenter continues to be selective in their distribution partners, quality of traffic will still be high.  The MSN technology development should still maintain its momentum and enhancements.  Additional features, such as transparency to placement performance and the ability to pay based on individual placements will increase advertiser control on optimization and should improve account performance.” Barbara Palmer | President:  “Look, something had to change.  Business as usual was not working at Yahoo! and a new management regime had to get something done to restore investor, employee and consumer confidence.  And while I have a lot of friends and colleagues that 'bleed purple' I think even they knew that a dramatic shift would need to take place to keep Yahoo! moving forward.  While I'm sure other friends and colleagues at Microsoft feel like they are winning the great search war, I actually believe both organizations - and ultimately consumers - will benefit from a worthy competitor to Google.  I for one look forward to all the hoopla, but ultimately the bar being raised for all - and by all - involved.” Keith Wilson | Director, Display Media:  “The partnership between Yahoo! and Microsoft creates a larger pool of data to use for targeting display ads with a larger aggregate pool of impressions available to reach them. It will take time, but this can also have an impact on advancing behavioral data beyond its current challenges.” We’ve all been speculating about a potential merger/partnership/strategic alliance for way too long.  While this announcement clarifies the terms, it only starts the clock ticking on a whole new period of regulatory review and implementation.   We’ll be monitoring the events very closely over the coming months, so check back for additional news, predictions, and commentary.  In the meantime, leave us a reply and share your thoughts on the future of Binghoo.

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One Response to “Pondering Binghoo (Predicting the Future of Yahoo! and Bing, Part II)”

  1. Bradd Libby says:

    From a PPC bidding perspective, combining Bing and Yahoo! is a blessing. Part of the problem with bidding on keywords anywhere but Google is that traffic volume is so low that it makes it difficult to even see trends in performance. And the uncertainty in conversion rate estimates and CPA (or ROI) is even worse.

    Combining the number two (Yahoo!) and number three (Bing) search engines will make it easier to bid well, which will increase the value delivered to advertisers…at least until Binghoo’s market share slips to where Yahoo!’s is now.

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