Dive Brief:
- Yahoo is no longer only relying on Bing for search ads. The media giant revealed in its quarterly earnings report Tuesday it had signed deal with Google that provides web and image search services and search ads via Google’s AdSense for Search.
- Terms of the deal provide Yahoo revenue from Google search ads displayed on its properties and affiliate websites in U.S., Latin America, Canada, Africa and Asia markets, but not in Europe.
- Yahoo’s Q3 earnings fell short of expectations with revenue of $1.23 billion, compared to the anticipated $1.26 billion.
Dive Insight:
Despite another disappointing quarterly report, Yahoo has added a new revenue stream in a deal with Google for web and image search services and search ads. Yahoo had renegotiated its exclusive deal with Bing earlier this year that allowed it to make the move. With the addition, it adds Google’s AdSense for Search to its search roster. Per the terms of the deal, Yahoo has full discretion over when it uses Google's organic results and ads on both desktop and mobile.
In a statement, Yahoo said the deal provides it "with additional flexibility to choose among suppliers of search results and ads. Google’s offerings complement the search services provided by Microsoft, which remains a strong partner, as well as Yahoo’s own search technologies and ad products."
The deal is non-exclusive and only impacts Yahoo’s web properties in the U.S., Canada, Latin America, Africa and Asia. The European market was left out of the deal because of regulatory issues Google has been facing. And Yahoo and Google are delaying implementing the deal in the U.S. pending a review from the Department of Justice.
Yahoo reported discouraging third quarter revenue results at $0.15 per share, although its push for mobile, video, native and social – called MaVeNS – generated a year-over-year growth of 43%. Investors are also interested in seeing the outcome of Yahoo’s spinning off of its Alibaba holdings, valued at around $27 billion.
