Yahoo! (Nasdaq: YHOO ) is throwing in the towel on its Google AdSense clone.
After nearly five years of wooing third-party sites to swap AdSense for its targeted platform, Yahoo!'s Publisher Network was still in beta. Now that Yahoo! is outsourcing good chunks of its paid-search business to Microsoft (Nasdaq: MSFT ) , it made no sense to keep the languishing business going.
Thus, now may be as good a time as any for Mr. Softy to get into the game. After all, will Microsoft really enable Google (Nasdaq: GOOG ) to get even stronger by ceding its rival this lucrative space?
Tellingly, in its shutdown notice to publishers yesterday, Yahoo! encouraged webmasters to sign up with Chitika, a spunky, aggressive, yet ultimately small rival platform. There just aren't a whole lot of alternatives outside of AdSense. For Microsoft, that should be an engraved invitation.
If anything, the real shock is that Yahoo! didn't work closer with search partner Microsoft on YPN. It would have made a lot more sense for Microsoft to simply take over YPN and build from there. At the very least, yesterday's announcement could have coincided with the launch of a Microsoft-powered AdSense clone. Yahoo! could have simply guided investors there in exchange for some kind of juicy referral fee.
We can't rewrite yesterday, alas. Going forward, Google will be even stronger once Yahoo! shuts down its service by month's end. Even AdSense publishers may be nervous. YPN may been a fringe player, but without a competitor for unhappy customers to switch to, what's to stop Google from beefing up its profits by trimming the publishers' cut of its revenue-sharing program?
Revenue through Google's AdSense sites grew faster than its proprietary sites in its latest quarter, so the world's leading search engine is hardly smarting for hungry publishers. It remains the best game in town for small and medium-sized sites angling to monetize their pages. Sites like YPN or Chitika could ultimately become little more than a safety net for webmasters who are rejected -- or unceremoniously booted -- from AdSense.
Microsoft can make a difference here, and even if it has to pay publishers 100% of its resulting revenue -- or more, initially -- that outlay will be worth it. Of the $2.04 billion it collected by populating third-party sites with ads, Google returned $1.47 billion to publishers. A legitimate competitor can't simply match that 72% cut, because Google has a much wider pool of keyword-bidding sponsors than anyone else.
However, if anyone can stop Google from populating even more websites with "Ads by Google" blocks, it's Microsoft. Apple (Nasdaq: AAPL ) would be a natural, but it has to launch a search engine first. Smaller portals including AOL (NYSE: AOL ) and IAC's (Nasdaq: IACI ) Ask.com just aren't big enough to pose a threat.
So what are you waiting for, Microsoft? This window won't be open forever.
Should Microsoft get into the AdSense business, or should it stick only to syndicating its ads on the largest sites? Share your thoughts in the comment box below?
RSS Headlines
Fool UK