Yahoo Gemini Predicted to Grow Due to Search Partnership Alliance Renegotiation
Yahoo Gemini Begins Search Ad Testing
Yahoo predicts a potential shift of 30 to 60 percent of their click traffic from Bing Ads to Yahoo Gemini in the coming months thanks to the renegotiation of the search partnership alliance between Yahoo and Microsoft.
The latest development could prove lucrative for Yahoo, thanks to CEO Marissa Mayer and her negotiation tactics.
As of May, Yahoo will be testing search ads on Yahoo Gemini, the company’s native ad marketplace on a small percentage of desktop traffic.
All accounts that are opted into tablet traffic will automatically run on this percentage of desktop traffic.
According to a press release from Yahoo, the latest agreement allows both parties to better align product and account teams to enable faster innovation and increase responsiveness to their marketplace needs.
“Over the past few months, Satya and I have worked closely together to establish a revised search agreement that allows us to enhance our user experience and innovate more in our search business,” Mayer said. “This renewed agreement opens up significant opportunities in our partnership that I’m very excited to explore.”
The document filed with the SEC highlights a number of viable changes within Yahoo’s paid search infrastructure.
New Opportunities for Yahoo Gemini Under the 2015 Agreement:
- Yahoo can display its own search results and ads for 49 percent of searches on desktops, as well as on all searches for smartphones and tablets.
- Yahoo can sell its own search ads or pull search ads from another provider such as Google (49 percent of the time).
- Microsoft will continue to provide results and ads for the majority of desktop ads until 2020.
- Microsoft will take over the job of selling ads for Bing, while Yahoo will continue handling its own ads for Yahoo Gemini.
- After October 1st, both Yahoo or Microsoft can terminate the new agreement “at will”.
Microsoft is no longer Yahoo’s exclusive provider for searches on desktops
Previously, as stated in the 2009 Search Agreement, all of Yahoo’s search listings and paid search ads that appeared on desktop PCs were served by Microsoft. Additionally, Microsoft took a portion of the revenue for its ads.
“Prior to this amendment, Microsoft had all the technology -powering the ads on all of Yahoo’s owned sites and network [on personal computers]. Microsoft was the non-exclusive provider on mobile devices so they were also providing the algorithms for mobile but they weren’t exclusively doing it. Yahoo also had some hand in that,” Lewis Brannon, Retail Search Manager at CPC Strategy said.
As of now, Yahoo is only dependent on a little more than half of the search ads and the algorithmic web search results displayed on it’s own website.
These recent changes are another attempt by Yahoo to regain it’s strength in the online sector and rebuild it’s reputation as a leading search engine.
“No longer is Microsoft the exclusive algorithmic provider for searches on desktops and laptops. Yahoo did not want their algorithms to be Microsoft algorithms. If someone is coming to Yahoo to do a search for something – Yahoo wants to control how those search algorithms work. If advertisers are paying Yahoo money to run their ads, then they want to make sure that they have full control on the ads that show up and what the quality is,” Brannon said.
What is Yahoo Gemini?
Yahoo Gemini harnesses the powers of mobile search and native advertising into one unified, self-serve solution.
By bringing search and native ads together, Yahoo Gemini allows retailers to manage and optimize their ads in one place.
While clearly marked, native ads look and act just like other content on any given page.
When advertising appears naturally in content of any kind, it can create a seamless experience for users, increase engagement and improve performance for advertisers.
Native ads on Yahoo Gemini mobile search appear where people search for things on tablets and smartphones, and where people read the news, check email and search across desktops, tablets and smartphones.
Can Yahoo Gemini Save the Search Engine?
The latest renegotiation does speculate that Yahoo will opt out of their agreements with Microsoft come October 1st.
Since the amendment in April, Yahoo has seen a slight increase in stock price but it may be too early to tell if Yahoo’s latest shift will be able to turn around their search engine or ever compete with Google.
Although Yahoo was a major player in the search marketing space over a decade ago, they could not compete with the ever-growing Google Empire.
According to comScore Inc., in March 2015 it was reported Google controlled 64.44 percent of all U.S. desktop Web searches, while Yahoo and Microsoft combined only held about 32. 8 percent.
One smart move by Yahoo was maintaining control over their mobile, allowing the company an opportunity to chip away at the ever advancing mobile-friendly marketplace. According to eMarketer Inc. mobile search ads are expected to surpass desktop search for a total about $12.85 billion in the U.S. this year.
Under the new agreement, Yahoo now has an opportunity to sell some of that desktop traffic to another party, which could lead to potential revenue. It may seem like a long road ahead, but it’s pretty clear this was a major win for Yahoo as they continue to try and regain their stance in the paid search realm.
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