In what could be their last ditch effort to get the approval of the US Department of Justice, Google and Yahoo were reported to have revised the TOR of their pending search ad deal. Instead of the previous 10 years duration, the deal’s coverage was not reduce to 2 years. The deal also puts a cap to the search revenue that Yahoo can collect from the deal to only 25%. In addition, Google advertisers will also be given an option not to be placed on Yahoo search results page.
Reports of the revised search ad deal agreement are getting mixed reactions from industry analysts. One described it as a “more of a Band-aid than the extensive surgery that is need” for Yahoo.
While another speculates that although this deal would not have a large impact on Yahoo’s cash flow, it could be a prelude to a possible appeal for extension later on, especially if both Google and Yahoo have proven that their search partnership will not be harmful to the online search industry.
And I couldn’t help but agree on the said speculation. Google and Yahoo would need to prove that their search partnership would not mean that Google will be gaining more than 80% of the search market. Or rather Google would need to prove it. Should the search ad deal push through and Google managed to gain one or two percent of the search market that would add up to its current market share, it would still be on Yahoo’s lost and not of the other search engines. The search partnership would only affect what is inevitable – and that is Yahoo’s gradual demise on the search advertising market.
What Microsoft and the other critics should worry about is if Google manages to gain 80% of the search market share on its own, minus Yahoo’s paid search property. And in time, Google can achieve that with or without Yahoo’s help.
Going back to the revised search ad deal. The question that remains to be answered then is, will the US Department of Justice finally give it a nod?
