The guarantees didn't ramp; they were set at certain levels, depending upon assumptions of search traffic and search ad rates. So publishers' guarantees have been exceeding actual earned revenues, at least for the most part. So even if Google is able to double ad rates, most newspaper revenues wouldn't change. Midsize sites currently take in Yahoo search revenue in the four digits monthly.
- Put the arithmetic aside for a moment though and consider that newspaper publishers aren't sure whether they'd be part of the Google search ad program. At this writing, Yahoo's unsure whether the Google ads would be provided to newspaper partner sites (as opposed to Yahoo.com, the core destination of the ads) and newspaper partners are waiting for that answer, though, given the arithmetic above, it may be mainly an academic question.
The Google deal though raises two other big questions for all those newspapers -- owned by MediaNews, McClatchy, Belo, New York Times Regional Group, Scripps, Hearst, Gatehouse, Media General, Lee, Cox and more.
#1 is what the Google deal portends for Yahoo's advertising strategy. As Ballmer has recently said in summing up the Google/Yahoo search ad deal: "Google's won." So if Google has won the search ad game (which accounts for 42% of the online ad market, according to IAB), then where does that leave Yahoo? Yahoo has increasingly talked about its lead in display ads (21% of the ad market), the kind of ads that AMP is intended to bolster.
Even Yahoo, though, has acknowledged that the line between search ad revenue and display ad revenue is thin one, and one that may disappear.
Take this statement out of Yahoo, in a recent response to Microsoft's offer, to buy just Yahoo's search business, when it said it was no longer interest in the whole company.
"A deal for Yahoo search) would not be consistent with the company's view of the converging search and display marketplaces."
Separately, of course, Jerry Yang and Sue Decker have made the point that display and search are two different worlds.
It's hard to have it both ways.
Clearly, I think, Google with its mojo, its DoubleClick acquisition and the foibles of its two closest competitors (Yahoo, Microsoft), is becoming a monopoly in the online ad game. Recall that MSN has a little less than 10% of the search ad market, leaving the new Google/Yahoo partnership with 90% or so. That's Boardwalk, Park Place and lots more, including it would seem all of Panama. After MSN, all that's left for search marketers are companies like Kanoodle, Miva and Looksmart, each clearly in a second tier, and unable to satisfy the marketing needs of big advertisers.
