In simple terms, Microsoft will now power Yahoo! search while Yahoo! will become the exclusive worldwide relationship sales force for both companies’ premium search advertisers.
But it’s not all simple and straight-forward. If Bing now powers Yahoo! search, what happens to Yahoo! Paid Inclusion?
What is Paid Inclusion?
Yahoo! Paid Inclusion is a pay-per-click product that allows an advertiser to pay for a listing in the search index. That’s right, you can pay to look like an ‘organic’ listing. Paid Inclusion is the dirty little secret that nobody at Yahoo! talks about and is only whispered about among advertisers.
Will Yahoo! Paid Inclusion Survive?
At first glance it might seem that Paid Inclusion will go the way of the dodo bird. Or will it? The second key term provides an opening.
Microsoft will acquire an exclusive 10 year license to Yahoo!’s core search technologies, and Microsoft will have the ability to integrate Yahoo! search technologies into its existing web search platforms;
While this statement is clearly about the Yahoo! search algorithm and (perhaps) ancillary products like SearchMonkey, it could also apply to Paid Inclusion.
The reach of Yahoo’s Paid Inclusion product has never been clear and, therefore, the actual revenue Paid Inclusion generates is also a bit of a mystery. Is Paid Inclusion revenue big enough to preserve through this partnership or not?
Paid Inclusion and SEO
Paid Inclusion already obscures Yahoo! SEO. If Paid Inclusion goes away, many advertisers who were getting traffic ahead of natural listings will suddenly be at the mercy of natural SERP and SEO. There could be a substantial traffic impact for these advertisers who have come to rely on a certain amount of traffic at a predictable ROI.
Should Paid Inclusion not survive the partnership, SEO – Bing SEO specifically – will become more important. If Paid Inclusion does survive, does it do so just on Yahoo! properties or would it be integrated into Bing results as well? If it is the latter, Paid Inclusion becomes much bigger.
In the final analysis, I don’t think Paid Inclusion revenue is large enough, can’t see Bing integrating Paid Inclusion and similarly can’t see Microsoft wanting to explain why searches on Yahoo! and Bing are materially different.
For these reasons I’m guessing that Paid Inclusion will be terminated.
UPDATE (July 30, 2009)
Danny Sullivan was able to land a question during the Yahoo! press conference.
I asked what happens to other things search like at Yahoo? What powered Yahoo News? What happens to the Yahoo Directory? Is Delicious search? And what happens to Yahoo paid inclusion?
Bartz: We have full flexibility on what to do within our own sites. Paid inclusion, we’ll decide on that later.
So Paid Inclusion still has a chance of surviving but it seems like it’s on life support.