Peter Kafka

Recent Posts by Peter Kafka

Coming Soon to Yahoo: Ads From Google

marissa_mayer_at_d_600-2Remember when Google and Yahoo were talking about an ad alliance last year?

Maybe they worked something out, after all: Sources say Google is set to begin running some of its AdSense display ads on Yahoo sites, and will become one of several ad networks Yahoo uses to fill some of its pages.

That means that the two companies will have a relationship similar to the one that Google has with publishers all over the Web: They give Google access to some of their unsold inventory, and Google inserts small ads it runs on behalf of its advertisers.

Last year, Google and Yahoo had lengthy discussions about a more involved ad tie up, including a scenario where Yahoo would essentially hand over its ad serving operations for all of its lower-priced ads directly to Google.

Those talks seemed to have petered out after interim CEO Ross Levinsohn was replaced by Marissa Mayer. But it’s worth noting that since then Mayer has hired former Google ad executive Henrique De Castro as her chief operating officer.

I’ve asked Google and Yahoo for comment. (Update: Here’s a blog post from Yahoo that confirms the move. Oddly, it has a publication time of 2:02 pm, which I assume is Pacific time, but is also in the future.)

It’s worth speculating whether the AdSense ads will lead to something bigger: Right now, Yahoo has a long-term deal with Microsoft to handle its large search ad business. And Mayer has publicly discussed her disappointment with the way that alliance has worked for Yahoo.

On the other hand, any truly significant tie-up between Yahoo and Google would certainly undergo a whole lot of regulatory scrutiny. Presumably the two companies think what they’re doing now won’t cause any problems in Washington or Brussels.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work