Yahoo turns to Google for ads: sign of a new friendship?
Less than a year since she joined Yahoo, Mayer has started to make the once-great internet company her own. She has started the process of putting her imprint on Yahoo’s corporate culture, and tapped ex-Googlers, including Google ad executive Henrique De Castro, to join her.
So far, there are positive signs that Mayer’s strategy is working. Yahoo beat analyst expectations with its last earnings report, and while it still has a long way to go, Mayer is off to about as good a start as Yahoo investors could have reasonably hoped for.
Yahoo, meet Google
Given the rumors around the relationship between Mayer and Google when she left, and her desire to remake Yahoo into a strong technology-based company, one might not expect to see deals between Yahoo and Google, but that’s exactly what the company announced yesterday.
The first Yahoo-Google deal in the Mayer era is, perhaps not surprisingly, an advertising one. Under the terms of the global, non-exclusive agreement, Yahoo will run Google AdSense for Content and Google AdMob ads “on various Yahoo! properties and certain co-branded sites.”
According to Yahoo’s blog post announcing the deal, “By adding Google to our list of world-class contextual ads partners, we’ll be able to expand our network, which means we can serve users with ads that are even more meaningful.” The company added that users probably won’t notice any changes on the affected properties.
On the surface, Yahoo’s decision to tap Google for contextual ads seems like a sensible and pragmatic one. Google is the leader in the space, and it’s likely that by adding Google ads to the mix, Yahoo should be able to increase revenue in the near term, at least modestly, on the properties covered by the deal.
While any deal that expands Google’s reach to new, highly-trafficked branded properties, in theory, good for Google advertisers, this deal probably doesn’t mean a lot to them in the overall scheme of things. But even so, it’s worth noting and keeping an eye on because the agreement signals that a friendship between Yahoo and Google is not only possible, but perhaps likely. And if that friendship develops and grows, don’t be surprised if future collaborations are broader and more meaningful than this one.