Yahoo’s fate has been a hot topic of discussion for most of 2008. Earlier this year, there was talk about Microsoft acquiring Yahoo for $45 billion. On June 12th, Google announced an advertising agreement that gave Yahoo the option of using Google to provide ads on its network of websites in the U.S. and Canada.  However, on November 5th, it was announced that Google decided to end the agreement with Yahoo Search, in order to avoid a challenge from the U.S Justice Department.

David Drummond, Senior Vice President and Chief Legal Officer at Google, said in the Google blog, “After four months of review, including discussions of various possible changes to the agreement, it’s clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn’t have been in the long term interests of Google or our users, so we have decided to end the agreement. Google plans on staying focused on what they do best: creating useful products for our users and partners.”

The partnership between Google and Yahoo was originally discussed to prevent Microsoft from purchasing Yahoo. The acquisition of Yahoo by Microsoft would have proposed a more serious competitor to Google.  To avoid this acquisition, Google’s management took a risk by agreeing to the Yahoo partnership, knowing the merger would intensify the government’s scrutiny of Google’s dominance.  Many industry professionals feel that Google already has too much power, and it doesn’t seem to be slowing down anytime soon. According to a recent article in Ad Age, Google’s search-query share hit 63% in August. 

Now that Google declined the Yahoo search deal, many still believe Microsoft will make another attempt to purchase Yahoo’s search engine, especially now that it can be bought for much less then the originally proposed $45 billion.  Another theory is that Yahoo will join forces with a combination of AOL, Ask.com, and News Corp. Most marketers want to see healthy competition in the search engine space. Healthy competition results in lower prices and a more even playing ground.  By joining forces with any of the above mentioned, Yahoo could become the second biggest player in the search engine space.

Communicating the importance of online and offline marketing integration is something that I speak with clients about on a regular basis. As a Client Strategist at an online marketing agency, the typical conversations tend to deal with SEM, SEO, and design efforts.  However, I try to stress the importance of understanding their offline marketing efforts, to better implement what we are promoting online.  Each medium used in a marketing plan needs to work together to tell a story.  That being said, in today’s economy, it is more important than ever to allocate your marketing dollars to the most effective media.  Due to the tracking and analytical capabilities of online search marketing, paid search seems to be the first choice for many organizations.

Despite the instability of today’s economy and the decline in traditional media spending, the future of online ad spending in the US looks to increase over the next several years. According to a recent eMarketer report, more than eight out of 10 marketers who spent at least $50,000 per month on paid search said they planned to maintain or increase their spending during the next 12 months. eMarketer estimates that paid search spending will not only rise in 2009, but double between 2009 and 2013, when it will approach $24 billion. 

Advertiser’s migration toward search advertising stems from its measurability and accountability functions. Companies are looking for a more defined method to apply to their marketing plans, hence the spending shift from offline traditional media, to online media.

So as 2009 marketing plans are being budgeted for, advertisers need to keep two things in mind.  First, advertisers should consider allocating more of their marketing budgets to search and other online initiatives, due to their tracking capabilities. Search spending is on the rise, and every company should be on board!  Second, advertisers need to make sure that every marketing effort is integrated together to tell a consistent story.  Televisions ads should drive people to search for the products, services and promotions mentioned in the ad.  Search needs to represent the same products, services and promotions. The landing page that search traffic drives visitors to needs to represent the same offerings, etc.

Over this next year, I challenge advertisers to work with their marketing team and/or agency to determine the best strategy for the company and its services.  Working together will drive the best results!

As more people continue to use search engines, the competition between the engines continues to grow.  Google, has been the dominate force for several years. Its mission is to “organize the world’s information and make it universally accessible and useful”. Its relevant results and simple interface has earned its place as the most popular search tool in the US.  Outside of relevant results, what else attracts people to use a particular engine?   

A few months ago, MSN introduced Live Search’s cashback program, which allows searchers to earn cash back once they have purchased something on Live.com, from a participating advertiser. The searcher can recognize a cashback offer by seeing the logo below, next to a sponsored result.

In addition to the Cashback program, Microsoft recently launched its latest attempt to try and gain more of the search engine market share. SearchPerks gives users reward points/tickets, when they search on Live.com.  In order to participate, users must sign up before December 31st and agree to download a small program called the Perk Counter, which tracks their search activity.  Once the user is signed up, they immediately earn 500 tickets. Then, depending on how often a user searches on Live.com, they can earn up to 25 tickets per day. Once the promotion ends on April 15, 2009, the participating user will be able to redeem their tickets for prizes.

Is it time for search engines to try something new? Are users looking for something beyond what Google offers?   In my opinion, the best gift an engine can give is a relevant result.  Offering free prizes, in order to get me to search, does not appeal to me. However, maybe this promotion will appeal to others.  It is still too early to tell if this will help increase Microsoft’s market share, but it should be interesting to keep an eye on.