COOPER ON SEARCH

Yahoo needs to work on its network's performance

Fri, 22 Jan 2010 | By Will Cooper

The focus in the battle between the search engines is usually how well their main sites are performing. What’s often overlooked by those who aren’t at the search coalface are the respective Google, Yahoo and Bing publisher networks – those third-party sites that serve search ads within.

These are big revenue generators for all three major players. Google today said network sites, including its search network, generated the company £1.04bn through the fourth quarter of last year, equivalent to 31% of its total revenues.

However, ensuring they’re delivering to the best of their abilities and incentivising people to click on the ads being served isn’t always easy because the networks are very large.

Yahoo’s search network came under scrutiny this week for this reason. Global search agency Efficient Frontier’s search engine performance report showed that Yahoo’s share of search spend fell from 9.1% to 8.1% between Q3 and Q4 2009 (nma 21 January 2010). That’s for both Yahoo.com and its network, but search specialists, including Efficient Frontier’s Jonathan Beeston, told me a key reason for this is that the extended Yahoo network isn’t performing.

This isn’t a new issue for Yahoo. Back in 2007 Richard Firminger, then Yahoo’s regional sales director for northern Europe, spoke of how the company was trying to improve the quality of partner sites, including Cheapflights, Five and Guardian Unlimited, by offering discounts to those that increased click-throughs and conversions (nma 15 November 2007).

Two and a bit years on, this doesn’t seem to have been working. This is a problem if, as is suggested by search agencies, Yahoo is over-reliant on its publisher network. While Google’s search network generates approxiately a third of its search revenues, I understand Yahoo’s is much more than that.

With Microsoft and Yahoo’s search deal still a while away from being completed, reports such as Efficient Frontier’s won’t do much but give Ballmer and co further concerns as to the final value of their acquisition when it’s completed.

Yahoo needs to prove it’s driving quality and conversions across this network, either by working harder with the sites on it or perhaps scaling down the number it works with. It’s certainly not an insurmountable task but it would be great to see a popular brand showing that the fight’s still there.