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It Takes an iVillage

Is Yahoo! (Nasdaq: YHOO  ) ready to fight back? Last week, iVillage (Nasdaq: IVIL  ) announced that it was turning to Yahoo!'s new targeted text ad network to service the search and contextual marketing needs of its 15.5 million unique monthly viewers. It may not seem like much of a coup until you realize whom Yahoo! will be replacing: Come next week, iVillage will be giving Google's (Nasdaq: GOOG  ) search results the boot.

Over the past few years, Yahoo! seems to have been losing a constant tug-of-war with the online giant in its battle for dot-com dominance. Yahoo! has a successful free email service? Google launches a similar free product with greater capacity. Yahoo! acquires contextual advertising pioneer Overture? Google launches its own AdWords and then fires up its popular AdSense ad distribution system for small and medium content sites. Every evolutionary -- and revolutionary -- step of the way, it seems as if Google's been tugging harder while Yahoo! walks away with rope burns.

That's why it's such a big deal that Yahoo! has landed iVillage, the popular online destination for women. In one stroke, Yahoo! has established some publisher credibility while it beefs up attention to its new Yahoo! Publisher Network service.

The AdSense clone is still in beta. Yahoo! didn't even make the offering official until earlier this month. But if Yahoo!'s product delivers higher revenue to publishers, defections could follow that may prove hazardous to Google's health.

Time Warner's (NYSE: TWX  ) America Online is a Google AdSense partner and accounted for 12% of Google's revenues last year (and 11% so far in 2005). That isn't to suggest that AOL will also bolt for Yahoo!'s pastures when its contract runs out. It does, however, suggest that Google needs to make sure it keeps all of its content partners loyal.

Google prides itself on its distribution network, which includes hotbeds of page views like AOL, InterActiveCorp's (Nasdaq: IACI  ) Ask Jeeves, and Earthlink (Nasdaq: ELNK  ) . For one more week, at least, that also includes iVillage. After that, Google's village gets a little bit smaller.

Time Warner is aMotley Fool Stock Advisorrecommendation. Clickherefor a free trial to Tom and David Gardner's pioneering newsletter.

Longtime Fool contributor Rick Munarriz digs Google, but he does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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