Bronte Media

Battelle suggests that Yahoo and MSN should spin off their search monetization parts and merge them together. I.e. re-form Overture.

I think he is half right. They should give up on monetization and focus on re-establishing their market share in query volume. Point 100% of their efforts into making their search more useful and avoid getting trampled on globally by Google. They probably can’t do much more than they are doing in the US, but Google is a near monopoly in many other parts of the world and they each should focus on getting 20% of those markets.

They should then sign a deal with Google to show adwords.

Wall Street types would cream their pants over the short term lift in revenue. Strategically, it’s just not that valuable to own the advertiser relationship. Ask gets around 90% of the revenue Google generates from displaying ads on their page and Google’s average payout is 80%. Google also seem hell bent on expanding into markets where they have no wholly-owned usage like radio and TV. Honestly, let them. Who cares.

I think a workable interim solution though is to have Google ads running on 20% of Yahoo and MSN search pages and show the internal teams exactly how far they have to go and also give them an inside track on what works and what doesn’t. If they fail after 18 months, scrap the initiative and run Google ads 100% of the time.