A deal has been announced that will see Yahoo act as the exclusive provider of sponsored search and contextual ads to all of Viacom’s web properties.
Analysts and commentators have suggested that Viacom’s billion-dollar lawsuit against Google may have been as much a contributing factor as its confidence in Yahoo’s ability to effectively monetize traffic.
It appears that Google’s loss is Yahoo’s gain, at least when it comes to dealing with Viacom.
This deal is a gigantic shot in the arm for Yahoo, who earlier this year launched Project Panama to favorable reviews, but has failed to make up any sort of significant ground in the war with Google for search share. Now Yahoo has a big-name client under it’s belt, something that it can tout when courting potential advertising partners in the future.
The announcement may be a product of necessity for Viacom rather than a victory for Yahoo. Om Malik gives his take:
Having already sued Google, Viacom had no option but to embrace Yahoo. The fact that Yahoo is not making any revenue guarantees (or so it seems from the press release) shows who had a better hand in this round of web-poker. Nevertheless, Yahoo walks away smelling a little better from this deal, designed to blunt the growing influence of Google in the contextual advertising market.
As Google’s search share continues to increase, many have been wary of Yahoo’s ability to effectively monetize web traffic over the long term if it continues to lose ground.
One also has to wonder if Yahoo was Plan B for Viacom, since they very well couldn’t sign a big deal with Google in the midst of all the copyright litigation.
Jeremy Zweig, VP of Corporate Communications at Viacom, addresses the concerns in a conversation with Murdok, “We considered partnerships with the major players in this area, and determined that Yahoo would be the one that could provide the best user experience and monetization opportunity. The issues that you brought up are kind of peripheral, from our perspective.”
I hope I get to the point in my life where a billion-dollar copyright infringement suit is “peripheral” compared to everything else.
Even still, Viacom doesn’t come right out and deny that its ongoing litigation with Google had at least some role in its decision to go with Yahoo.
