Yahoo's Suicide Pact with Google

Yahoo wants to be in bed with Google. Google wants to own the bed, the house, and the landing strip in the back yard. Probably the most talked about yet least understood marketing collaboration in the history of the Internet, the Yahoo/Google remarriage has everybody in the business buzzing.

We're just ahead of three years since Yahoo severed its relationship with Google and, like so many other ill-fated toxic relationships, it seems the two information access portals can't stand to be together or apart.

Maybe it's a great way to push Microsoft away. On the other hand, inviting Google in for a short-term romp might just shut Carl Icahn up. Who cares if Yahoo outsources its search advertising to Google? You should, and here's why.

Morons and Their Money

What's that old saying about fools and their money? Overstock.com's VP of Tactical Marketing Geoff Atkinson told Bloomberg that the partnership between Google and Yahoo should help the relevancy of advertising on Yahoo.

Elsewhere in lunacy, Maurice Levy, the chairman and chief executive of agency giant holding company Publicis Groupe, added that the deal would be "very positive." This is the same guy who announced a "partnership" with Google early this year.

Partnership is a lovely term as it covers all manner of good and evil while saying exactly nothing in the process. Agency managers I've spoken to recently are still struggling with Google's arguably one-sided advertising terms and conditions.

Maybe the negotiations will go better once Google is the only place to buy search ads. Maybe Hillary Clinton will get back into the presidential race as well. I hear the American dollar is about to mount a giant comeback against the Euro, too.

Government Action?

Anti-trust regulators haven't yet commented on the proposed initiative. Just a wild guess here, but the details of the relationship would first have to be laid out in detail before any regulatory commission could take action.

At this point, the deal is sufficiently (and by design) so vague, even the Yahoo managers I spoke to last week were wondering what to tell their biggest clients. Way to go, Yahoo. Nothing like leaving your managers in the dark while attempting to drench the industry in happy gas. Thank goodness your best people aren't running out the door. Keep up the good work.

Levy and Atkinson can both be counted in the group that doesn't think search ad prices will increase as a result of the proposed alliance. Newsflash: prices are increasing with or without the collusion ... er ... co-opertition, I mean collaboration.

On what planet is having only one place to buy anything a good thing for competitive pricing?

Six of One, Half Dozen of the Other

Microsoft doesn't like the idea of Yahoo and Google coming together, big surprise there. Yahoo President Sue Decker defended the deal in a Reuters interview last Friday by saying tests had concluded that Google serving ads into Yahoo wouldn't prevent the expansion of Panama. She's right: weak technology is preventing Panama expansion, not Google.

By the way, I'd love to take a look at the raw data from those tests.

Yahoo is quick to point out that it will control the flow and frequency of Google ads in search results. Much in the same way, I control the flow of oxygen into my bloodstream. I can stop breathing any time I want.

I have just one question for Ms. Decker: if you can turn it on and off and you want us to believe you have all the control, why are you doing it at all?

Of course, the option still exists for Yahoo to partner with other third parties to "backfill" search revenue. History has taught us that mixing search ads into results go together like peanut butter and pickled herring, so why not go for it?

Winners, Losers, and Loners

The bigger picture here is the ongoing battle for display advertising dollars. With revenue sourcing issues out of the way, Yahoo can focus on dominating the display world, or simply wait for Google's program to gain critical mass and start serving Google ads.

At the end of the day, big agencies might win, because buying search advertising from one source is much simpler than trying to manage multiple search buys. Online media integration will be easier, and thinking (as it relates to search advertising) will no longer be necessary. Google can simply tell us what to think and where we should go to find ourselves.

I can understand why Yahoo is bleeding talent. As a long time supporter and fan of Yahoo, even I feel a bit betrayed; I can't imagine the rage some Yahooligans must feel. Are we still saying Yahooligan? Maybe Gooligan?

Yahoo wants us to believe this is simply a partnership to help build revenue while they continue to build a portal. Some advertisers don't think prices will increase. Wake up people, the emperor of Jonestown is buck naked and the only thing we've yet to discover is the flavor of the Kool-Aid.