How will a GooHoo deal effect PPC?

For those who have not heard, there are new bites and rumors about a potential deal between Google and Yahoo. This deal could be worth $1 billion in revenue to Yahoo. Under the agreement Google would serve ads in Yahoo's search results. It seems to me that there are pros and cons to Google serving its ads in Yahoo’s search results. These are five items that came to mind when reading about a potential Google/Yahoo deal.

Pros of Google Yahoo Advertising Deal:

• More search advertising through the same Ad Words interface: I am a fan of the Ad Words interface. I think its leaps and bounds ahead of anything thing else out there. Being able to conduct both Yahoo and Google advertising in the same interface would save me a bunch of time and frustration.


• Ward off the Evil Empire: while I would agree with the notion that Google is attempting to take over the world, I would rather have Google running things that Microsoft. The Microsoft hegemon is always looking after itself. The Google hegemon on the other hand realized a long time ago that its interests were tied to its customer’s satisfaction.

Cons of Google Yahoo Advertising Deal:

• Quality Issues: I have always felt that the leads I received from Google were much better than the leads received from Yahoo. I suspect this has to do with the demographic differences in users, but neither of the search engines has been willing to share their market research with me. I suspect in Yahoo’s case they either don’t know or my account manager does not know who knows (if that makes sense).


• Pricing Instability: Those who conduct a lot of competitive SEM will know that the PPC market can be lively. Adding an additional, and large, channel to Google’s network would force prices to find a new equilibrium. Also, Google’s clicks are generally more expensive that Yahoo’s. Will Yahoo’s clicks (served via Google) become more expensive or stay the same? Will Google clicks get devalued? In the final analysis is would probably be different for everyone, depending on how you set up your campaign and your industry. Maybe the Ad Words interface would give you the choice of networks.


• Possible Algorithm conflicts: My first question is who’s algorithm chooses the ads? The obvious answer would be Google’s but will there be any interaction between Yahoo’s search algorithm and Google ad serving algorithm? Example: Yahoo tries to guess what you really want, then Google takes those results and further tries to guess what you really want. I guess this is a minor problem as both Yahoo and Google employ smart people who will be able to work it out.

Please share your thoughts.