2011-09-25 14:35:57 -

Author: admin

Yahoo! Search Marketing is an internet advertising service that uses “Pay per click” and “Sponsored search” methods of advertising.

Yahoo first started to offer this advertising service after they bought out a company named Overture Services, Inc. Before Yahoo made the purchase, the company was known as GoTo and operated the website GoTo.com. They were the first company to successfully offer a service allowing advertisers to search using keywords to find the best placements for their ads.

GoTo.com
GoTo.com changed the way internet advertising was used when the implemented their sponsored searches into an online advertiser’s collection of advertising tools.

In 1998, GoTo set up auctions that allowed advertisers to bid on ad placement. The highest bidders would have their advertisements placed

higher on search engine websites. The advertiser would bid on how much they would pay per click they received. This method is known as the pay per click method, where advertisers only pay their ad server when someone clicks on their ad.

GoTo created a business plan that emphasized the importance of the quality of their customers. They thought it was only logical that the more website owners pay for their ads, the more money they must have and therefore the better and more reputable their website must be.

GoTo was very successful with their auctions and advertisers would be bidding twenty-four hours a day to try and get the best ad space possible. While other ad servers were getting stuck with shady businesses and lower quality websites using them to advertise, GoTo was receiving the highest quality customers in the ad serving business.

In 2001, GoTo.com, Inc. changed its name to Overture Services, Inc. They did this for two reasons. One reason was that the name sounded more professional. The other reason for the name change was that the new name would allow for the company to keep their name if their business expanded because the new name covered every kind of business that they could possibly become involved with.

Overture then established several partnerships with partners such as MSN and Yahoo! which allowed them to take advantage of the millions of advertisers and internet browsers that use those popular sites for their daily internet use. The new partnerships made Overture an ad serving company with resources that other similar companies simply could not match.

Overture used some of their new profits to purchase the companies that ran the websites as AltaVista.com and AlltheWeb.com

Yahoo! Acquisition of Overture
In 2003, Overture’s biggest customer, Yahoo!, decided to buy out Overture. The cost of the acquisition was more than one and a half billion dollars. Yahoo! has since removed the Overture name for their advertising services and replaced it with their Yahoo! name except for in Japan and Korea where the Overture name still exists.

Current Services
Yahoo! has taken the formula that Overture formally used to successfully create their ad searching tool and has innovated it to take it to a higher level. They first released their service that used their new formula in 2007. Its new formula is very similar to the one used in Google AdWords; it ranks advertisements based on the search results it receives in its search engine. Although the formula they use has never been publically released, Yahoo! has given users a basic understanding of how the formula works. An advertiser’s bid is multiplied by its click through rate on its ads. The product of those two numbers determines the quality of the ad which then determines which web pages an ad will be placed on.

Yahoo! Search Marketing comes equipped with features such as geo targeting, ad testing, campaign budgeting and campaign scheduling that make it easier than ever before for an advertiser to run a successful advertising campaign.Yahoo! even has an application that their advertisers can install to control every aspect of their campaign from their desktop at all times.

Patent and Litigation
In 1999, when GoTo was still the name of the company, GoTo.com filed a patent application to attempt to own the rights to their method of using search engines and internet searches to match advertisers with people who are interested in what they are advertising. The patent was granted in the United States in 2001, in Australia soon after and has been granted in several other countries since then.

Before Yahoo! acquired GoTo, GoTo had filed lawsuits against multiple websites for copyright infringement based on their patent. One of the companies they filed a lawsuit against was none other than their biggest competitor; Google.

The lawsuit filed against Google was associated to Google’s AdWords service. In 2002, Google’s AdWords service had just begun using a service very similar to the one that GoTo or Overture had been using.

Once Yahoo! acquired Overture, the lawsuit was settled. Google agreed to give nearly three million shares of common stock to Yahoo! in exchange for a license allowing them to use their advertising service methods.

Another Partnership
In 2003, Yahoo! formed a partnership with Gator Corporation, which is now known as Claria Cooperation. Gator was a company specializing in everything that can possibly fit under the title of adware. Gator’s part of the partnership included monitoring an internet browser’s online activity and collecting and recording keywords that they used when using all major search engines. The keywords would then be applied in Overture’s search engine. This led to advertisers who had placed ads in Overture finding their ads in Gator even though they had no relation to Gator and may not have even known that the Gator Cooperation existed. Overture was heavily criticized for this but their business remained as strong as ever.

Once Yahoo! bought out Overture, the Gator or now called Claria software weakened the use of Yahoo’s services. When people who used the Claria application tried to install and use the Yahoo! toolbar, they would end up with the same search results and advertisements being shown.

Yahoo! then modified the Yahoo! toolbar to make it capable of removing adware and spyware their system and their user’s system. The new toolbar did not accommodate Claria very well and it created tension between Yahoo! and Claria. Since 2006 Yahoo! has not been listed as a partner of Claria and there are currently no signs that show that the two companies will be working together in the future.

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