Yahoo Links with Google

Google and Yahoo LinkupYahoo! Inc., the biggest U.S. Web portal, said it will begin using Google Inc.’s AdSense and AdMob services as it seeks to boost sales from the content on its pages.

The Sunnyvale, California-based company signed a global, non-exclusive agreement with Google for so-called contextual advertisements, according to a blog posting yesterday. The ads will appear on Yahoo’s sites for finance, news, sports and autos, Sara Gorman, a spokeswoman for the company, said in an e- mail.

Yahoo Chief Executive Officer Marissa Mayer plans to get users spending more time on a dozen of its top sites, she said during a call with analysts last month. The partnership with Google, her former employer, could help Yahoo boost revenue from those pages, said Mark Mahaney, managing director at RBC Capital Markets in San Francisco.

“I assume they wouldn’t be doing this is if they didn’t think they can better monetize their traffic,” Mahaney, who rates Yahoo shares outperform, said in an interview. “There should be a near-term positive.”

Yahoo jumped as much as 6.3 percent to $21.10 in extended trading following the announcement of a Google partnership. Earlier the shares rose 1 percent to $19.85 at yesterday’s close in New York.

Market Share

Google will retain its lead in the $17.7 billion U.S. market for display ads this year, with an 18 percent share, while Facebook Inc. will have 15 percent and Yahoo will slip to 8 percent, EMarketer Inc. estimates.

Users of Yahoo’s sites won’t see any noticeable difference in ads, the company said. The agreement covers Yahoo’s own sites and certain co-branded Web properties.

“By adding Google to our list of world-class contextual ads partners, we’ll be able to expand our network, which means we can serve users with ads that are even more meaningful,” Yahoo said on the blog.

During an interview last month at the World Economic Forum in Davos, Switzerland, Mayer said she prefers to work with large companies like Google, Apple Inc. and Facebook rather than build expensive new products such as smartphones and social networks.

“We are able to work with some of these players, who have a lot of strength, in order to really bolster our user experiences that we offer on the Yahoo site,” Mayer said.

The CEO joined Yahoo last July after a 13-year career at Google. The Web-search leader’s 20th employee and its first female engineer, Mayer is credited with maintaining the company’s uncluttered home page for a decade and overseeing such products as Gmail, Google News, and image, book and product search.

In 2008, Google scrapped an agreement to place ads on Yahoo’s site after the U.S. government threatened to challenge the venture.


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