Yahoo! Search Marketing
Encyclopedia
Yahoo! Search Marketing is a keyword-based "Pay per click
" or "Sponsored search
" Internet advertising service provided by Yahoo!
.
Yahoo began offering this service after acquiring Overture Services, Inc. (formerly GoTo.com). GoTo.com was an Idealab
spin off and was the first company to successfully provide a pay-for-placement search service following previous attempts that were not well received.
spin off and was the first company to successfully provide a pay-for-placement search service.
In February 1998, GoTo offered advertisers the option of bidding on how much they would be willing to pay to appear at the top of results in response to specific searches. The bid amount was paid by the advertiser to GoTo every time a searcher clicked on a link to the advertiser's website. By July 1998, advertisers were paying anything up to a dollar per click.
GoTo's business model was based on the idea that its paid listings would make it more relevant than other services, especially for general searches, and web sites that pay more are probably better sites. A similar service had been offered by Open Text in 1996, but this precipitated outcries and bad publicity because searchers at the time did not want the search process more commercialized.
In contrast, GoTo's pay-for-placement model was very successful. Commentors theorised that the web had matured in the intervening two years, and these type of economic models were more acceptable since the web was no longer just a place for academic research, but also a place for buying products. GoTo founder Bill Gross (entrepreneur) speculated at the launch that GoTo would succeed because, as a relatively new service, it had no reputation to taint with paid listings, unlike Open Text.
On October 8, 2001, GoTo.com, Inc. renamed itself Overture Services, Inc. GoTo's chief operating officer Jaynie Studenmund said "We also felt it was a sophisticated enough name, in case our products expand."
Through partnerships, Overture enabled portals such as MSN
and Yahoo!
to monetize the hundreds of millions of web searches made each day on their sites. Indeed, these partnerships proved highly lucrative, and in a period otherwise marked by dot-com failures, Overture became a substantial profit driver for portals like Yahoo!
This success enabled Overture to acquire web sites such as AltaVista
and AlltheWeb
.
, for $1.63 billion. The old brand name of Overture has now been phased out as Yahoo! re-brands many of its products under the Yahoo! name. The exception to this is in Japan
and Korea
where the local businesses continue to use the Overture brand.
Yahoo! Search Marketing also provides features such as Geotargeting, Ad Testing, Campaign Budgeting, and Campaign scheduling. It also supports a RIA application which allows larger customers to manage their Yahoo! Search Marketing campaigns from the desktop.
Prior to its acquisition by Yahoo!, Overture initiated infringement proceedings under this patent against FindWhat.com in January 2002 and Google
in April 2002.
The lawsuit against Google related to its AdWords
service. In February 2002, Google introduced a service called AdWords Select that allowed marketers to bid for higher placement in marked sections - a tactic that had some similarities to Overture's search-listing auctions.
Following Yahoo!'s acquisition of Overture, the lawsuit was settled with Google
agreeing to issue 2.7 million shares of common stock
to Yahoo! in exchange for a perpetual license.
) an adware
company. Under the partnership, Gator's software monitored a web-user's activity on web sites and search engines (even sites such as Google that are not affiliated with Overture) and grabbed search keywords. These keywords were submitted to the Overture search engine. As a result, advertisers who paid for listings in Overture found their products advertised through Gator's Search Scout software, even if they wanted nothing to do with Gator. Overture faced a great deal of criticism for entering into this partnership.
When Yahoo acquired Overture, the Claria software impaired the operation of Yahoo's services. For example, when a user with a Claria application installed used Yahoo Search, they received a standard set of Yahoo results with sponsored listings at the top supplied by Overture. The user would then receive a full-screen pop-under window from Search Scout. Since Search Scout uses Overture's paid listings as well, Claria's window has exactly the same listings as the Yahoo search results.
Subsequently, Yahoo! came out with the Yahoo! Toolbar, which allows users to remove adware
and spyware
from their system. The toolbar affected the operation of Claria's software and may have put stress on the relationship between the two companies. Claria's website does not list Yahoo! as a partner and a March 2006 press release states that they are exiting the adware business.
Pay per click
Pay per click is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market...
" or "Sponsored search
Search engine marketing
Search engine marketing, , is a form of Internet marketing that seeks to promote websites by increasing their visibility in search engine result pages through the use of paid placement, contextual advertising, and paid inclusion...
" Internet advertising service provided by Yahoo!
Yahoo!
Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale, California, United States. The company is perhaps best known for its web portal, search engine , Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! Answers, advertising, online mapping ,...
.
Yahoo began offering this service after acquiring Overture Services, Inc. (formerly GoTo.com). GoTo.com was an Idealab
Idealab
Idealab is a business incubator based in Pasadena, California.-History:Idealab was founded by Bill Gross in March 1996...
spin off and was the first company to successfully provide a pay-for-placement search service following previous attempts that were not well received.
Origins of GoTo.com
GoTo.com was an IdealabIdealab
Idealab is a business incubator based in Pasadena, California.-History:Idealab was founded by Bill Gross in March 1996...
spin off and was the first company to successfully provide a pay-for-placement search service.
In February 1998, GoTo offered advertisers the option of bidding on how much they would be willing to pay to appear at the top of results in response to specific searches. The bid amount was paid by the advertiser to GoTo every time a searcher clicked on a link to the advertiser's website. By July 1998, advertisers were paying anything up to a dollar per click.
GoTo's business model was based on the idea that its paid listings would make it more relevant than other services, especially for general searches, and web sites that pay more are probably better sites. A similar service had been offered by Open Text in 1996, but this precipitated outcries and bad publicity because searchers at the time did not want the search process more commercialized.
In contrast, GoTo's pay-for-placement model was very successful. Commentors theorised that the web had matured in the intervening two years, and these type of economic models were more acceptable since the web was no longer just a place for academic research, but also a place for buying products. GoTo founder Bill Gross (entrepreneur) speculated at the launch that GoTo would succeed because, as a relatively new service, it had no reputation to taint with paid listings, unlike Open Text.
On October 8, 2001, GoTo.com, Inc. renamed itself Overture Services, Inc. GoTo's chief operating officer Jaynie Studenmund said "We also felt it was a sophisticated enough name, in case our products expand."
Through partnerships, Overture enabled portals such as MSN
MSN
MSN is a collection of Internet sites and services provided by Microsoft. The Microsoft Network debuted as an online service and Internet service provider on August 24, 1995, to coincide with the release of the Windows 95 operating system.The range of services offered by MSN has changed since its...
and Yahoo!
Yahoo!
Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale, California, United States. The company is perhaps best known for its web portal, search engine , Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! Answers, advertising, online mapping ,...
to monetize the hundreds of millions of web searches made each day on their sites. Indeed, these partnerships proved highly lucrative, and in a period otherwise marked by dot-com failures, Overture became a substantial profit driver for portals like Yahoo!
This success enabled Overture to acquire web sites such as AltaVista
AltaVista
AltaVista is a web search engine owned by Yahoo!. AltaVista was once one of the most popular search engines but its popularity declined with the rise of Google...
and AlltheWeb
AlltheWeb
AlltheWeb was an Internet search engine that made its debut in mid-1999. It grew out of FTP Search, Tor Egge's doctorate thesis at the Norwegian University of Science and Technology, which he started in 1994, which in turn resulted in the formation of Fast Search and Transfer, established on July...
.
Acquisition by Yahoo!
In 2003, Overture was acquired by its biggest customer, Yahoo!Yahoo!
Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale, California, United States. The company is perhaps best known for its web portal, search engine , Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! Answers, advertising, online mapping ,...
, for $1.63 billion. The old brand name of Overture has now been phased out as Yahoo! re-brands many of its products under the Yahoo! name. The exception to this is in Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
and Korea
Korea
Korea ) is an East Asian geographic region that is currently divided into two separate sovereign states — North Korea and South Korea. Located on the Korean Peninsula, Korea is bordered by the People's Republic of China to the northwest, Russia to the northeast, and is separated from Japan to the...
where the local businesses continue to use the Overture brand.
Details of current service
GoTo.com's and Overture's original services provided only a list of search results ordered according to the bid amounts paid by the respective advertisers. Yahoo!'s Search Marketing's latest iteration, code named Panama, was released early in 2007. It replaced the old formula with one more similar to what Google AdWords uses to rank advertisements against search results. The exact formula is secret, but it is basically Bid * Quality Score = Ad Rank, where quality score is based on the ad's CTR (click-through-rate), the relevance of the ad to the creative (known as "Quality Index"), and the 'quality' of the landing page the ad is sending the user to.Yahoo! Search Marketing also provides features such as Geotargeting, Ad Testing, Campaign Budgeting, and Campaign scheduling. It also supports a RIA application which allows larger customers to manage their Yahoo! Search Marketing campaigns from the desktop.
Patent litigation
In May 1999, GoTo.com filed a patent application titled "System and method for influencing a position on a search result list generated by a computer network search engine". The patent was granted as in July 2001. A related patent has also been granted in Australia and other patent applications remain pending.Prior to its acquisition by Yahoo!, Overture initiated infringement proceedings under this patent against FindWhat.com in January 2002 and Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
in April 2002.
The lawsuit against Google related to its AdWords
AdWords
Google AdWords is Google's main advertising product and main source of revenue. Google's total advertising revenues were USD$28 billion in 2010. AdWords offers pay-per-click advertising, cost-per-thousand advertising, and site-targeted advertising for text, banner, and rich-media ads. The AdWords...
service. In February 2002, Google introduced a service called AdWords Select that allowed marketers to bid for higher placement in marked sections - a tactic that had some similarities to Overture's search-listing auctions.
Following Yahoo!'s acquisition of Overture, the lawsuit was settled with Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
agreeing to issue 2.7 million shares of common stock
Common stock
Common stock is a form of corporate equity ownership, a type of security. It is called "common" to distinguish it from preferred stock. In the event of bankruptcy, common stock investors receive their funds after preferred stock holders, bondholders, creditors, etc...
to Yahoo! in exchange for a perpetual license.
Adware partnership
In April 2003, Overture announced a three-year partnership with Gator Corporation, (now Claria CorporationClaria Corporation
Claria Corporation was a software company based in Redwood City, California with products many considered spyware. It was established in 1998 by Denis Coleman. Its name was often used interchangeably with its Gain advertising network, which it claimed serviced over 40 million users...
) an adware
Adware
Adware, or advertising-supported software, is any software package which automatically plays, displays, or downloads advertisements to a computer. These advertisements can be in the form of a pop-up. They may also be in the user interface of the software or on a screen presented to the user during...
company. Under the partnership, Gator's software monitored a web-user's activity on web sites and search engines (even sites such as Google that are not affiliated with Overture) and grabbed search keywords. These keywords were submitted to the Overture search engine. As a result, advertisers who paid for listings in Overture found their products advertised through Gator's Search Scout software, even if they wanted nothing to do with Gator. Overture faced a great deal of criticism for entering into this partnership.
When Yahoo acquired Overture, the Claria software impaired the operation of Yahoo's services. For example, when a user with a Claria application installed used Yahoo Search, they received a standard set of Yahoo results with sponsored listings at the top supplied by Overture. The user would then receive a full-screen pop-under window from Search Scout. Since Search Scout uses Overture's paid listings as well, Claria's window has exactly the same listings as the Yahoo search results.
Subsequently, Yahoo! came out with the Yahoo! Toolbar, which allows users to remove adware
Adware
Adware, or advertising-supported software, is any software package which automatically plays, displays, or downloads advertisements to a computer. These advertisements can be in the form of a pop-up. They may also be in the user interface of the software or on a screen presented to the user during...
and spyware
Spyware
Spyware is a type of malware that can be installed on computers, and which collects small pieces of information about users without their knowledge. The presence of spyware is typically hidden from the user, and can be difficult to detect. Typically, spyware is secretly installed on the user's...
from their system. The toolbar affected the operation of Claria's software and may have put stress on the relationship between the two companies. Claria's website does not list Yahoo! as a partner and a March 2006 press release states that they are exiting the adware business.
See also
- Ad servingAd servingAd serving describes the technology and service that places advertisements on web sites. Ad serving technology companies provide software to web sites and advertisers to serve ads, count them, choose the ads that will make the website or advertiser most money, and monitor progress of different...
- EspottingEspottingLondon-based Espotting Media was founded in 2000. Along with Goto.com it was a pioneer of pay per click advertising on web search engines....
- Google AdWords
- List of search engines
- Microsoft adCenterMicrosoft adCenterMicrosoft adCenter , is the division of the Microsoft Network responsible for MSN's advertising services. Microsoft adCenter provides pay per click advertisements. This is a service aimed at people who want to advertise a product...
- Pay per clickPay per clickPay per click is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market...
- Search engine marketingSearch engine marketingSearch engine marketing, , is a form of Internet marketing that seeks to promote websites by increasing their visibility in search engine result pages through the use of paid placement, contextual advertising, and paid inclusion...