Dear Marissa: I Have $100 Million I Want to Give You

Dear Marissa,

All of us in the digital marketing space are rooting for you and Yahoo. We love Google and Facebook, don’t get me wrong, but we would also love to spend more money with companies other than Google and Facebook, and Yahoo seems the most likely candidate for this portfolio diversification strategy.

I’ve been thinking about how I could give you more of my money. Yahoo Stream Ads are a good starting point – we definitely have a lot of clients who like the reach and performance of these ads – though I can’t see this as a five- or even four-figure monthly spend for most of our clients.

No, I think to really get more of our wallet share, you’ve got to capitalize on two trends: native advertising and feed-based advertising. I know you are hip to native advertising – that’s the very point of the Stream Ads, right? The feed-based ads are gaining a lot of popularity over at your old employer, Google. They’re called “product listing ads” and are starting to take away a lot of prime real estate from those stodgy human-driven text ads. Actually, you’re already doing that as well at Yahoo, so check mark on that as well.

What I’m really thinking about is an ad product that combines both native advertising and feed-based advertising, not two separate products. I’m willing to bet that this new ad unit could make Yahoo around $100 million in incremental revenue a year. But hey, don’t take my word for it – dig through some old Yahoo earnings reports and you’ll see all the evidence you need. You see, this isn’t a new product at all – what I’m suggesting is that Yahoo resurrect paid inclusion!

You remember paid inclusion, right? It was all of those search results that looked like organic results but were actually paid for by advertisers. Google derided these paid results as being deceptive, and Yahoo and Bing ended up feeling pressured to drop the program – which was a shame, considering it was bringing Yahoo $116 million a year as of 2009.

Will this reduce quality for Yahoo’s search results? Probably to an extent, although you could also argue that advertisers willing to pay for a click – whether above or within organic results – wouldn’t buy a placement in the first place if they didn’t have a relevant product or service to sell. And besides, let’s be honest here. Regardless of the quality of Yahoo’s SERPs, the battle to be the default search engine on the Internet is over. Google has won. If Yahoo’s results dramatically improve or decline, it’s unlikely that your market share will change much in either direction. So why not accept second place and make an extra $100 million+ along the way?

So what do you say? I’ve already got feeds set up for my clients to get them into PLAs on Google – just use the same feed format and I could get all of this data sucked into your SERPs in a matter of hours. I’ve got to believe that $116 million of 2009 revenue is worth closer to $300 or $400 million today, given the dramatic increase you can charge for every click. And think of the incremental mobile clicks you’ll be able to get (I think there’s some law that requires me to mention mobile in every article; sorry about that, Marissa). My feed and my checkbook await your response.

 

Sincerely,

David

Tags: search
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3 comments about "Dear Marissa: I Have $100 Million I Want to Give You".
  1. Kevin J. Alexander from Sky Angel Networks, LLC , March 18, 2014 at 10:55 a.m.
    Well done! Love it.
  2. Steve Plunkett from Rockfish , March 18, 2014 at 11:09 a.m.
    Two Words... Yahoo! Directory
  3. David Rodnitzky from 3Q Digital , March 18, 2014 at 3:06 p.m.
    @Steve: DMOZ FTW!