Yahoo is poised to launch an ad network for small Web publishers styled on a similar offering from Google, sources familiar with the plan told ZDNet UK sister site CNET News.com, a move that promises to sharpen competition between the search giants.
While Yahoo and Google already go head-to-head for major search advertising partners such as America Online, Google has largely enjoyed a monopoly serving its signature text-only ads to smaller Web sites, including blogs.
Now Yahoo plans to launch its own advertising option for small publishers, a source familiar with the plan said. Like Google's service, Yahoo's self-serve product will display text ads deemed relevant to the content of specific Web pages. Advertisers pay only when a reader clicks on their ad. Yahoo and publishers will split the fees.
UBS Warburg this week upgraded Yahoo on expectations that the company will enter this new arena. In a further sign that a launch may be imminent, text ads have recently been spotted on some Yahoo employee blogs.
Dan Boberg, director of business partnerships for Yahoo subsidiary Overture Services, confirmed in an interview last week that Yahoo is interested in the market, although he declined to discuss details. "We're headed in that direction," he said.
Yahoo's push to expand its advertising reach comes as the market for search advertising is taking off, fuelling record revenue and profits at the Web portal. At the same time, Yahoo is busy looking for new revenue sources as it seeks to transform itself into an online media conglomerate and beat Google in the Web search game.
Tapping small publishers offers a promising growth path, given Google's earlier efforts in this niche.
In June 2003, Google expanded its ad services for large publishers, dubbed AdSense, adding a self-serve, automated product specifically aimed at small sites. As opposed to search-related ads, which are triggered by keywords entered into its search engine query bar, AdSense ads are targeted to the content of a page and its meaning. For example, a news story about a soccer match might display a sponsored link for soccer gear.
Google does not break out AdSense sales but includes them in a broader category that encompasses all syndicated search revenue. Collectively, those businesses made up 48 percent of Google's $3.1bn in revenue in 2004.
Bringing ads to small publishers would expand Yahoo's current advertising portfolio, which caters to its search engine and larger Web sites.
Yahoo's Overture subsidiary, which will be renamed Yahoo Search Marketing next month, has served ads to publisher Web pages since 2003, in a program called Content Match. The service is designed for large publishers, such as The Financial Times, and requires a vetting process to ensure quality when it comes to matching pages with ads.
