We all get what we deserve. Google
Let's see, here. Over the past few weeks, Viacom has bolted to upstart rival Joost as a distribution partner, initiated a lawsuit against Google, and is now running to Yahoo!
Laugh at Google, but there are more butts to this joke than there are butts at a Yankee Stadium home game or an ashtray at an Altria break room. See, Google isn't the only company with egg on its face here.
Let's laugh at Viacom
One can argue that going with Yahoo! as the source of its paid-search and contextual marketing needs is more emotional than practical. All anecdotal evidence points to Google as a more lucrative publisher partner than Google.
For starters, Google generates more online advertising revenue despite serving up fewer pages than Yahoo! You also have smaller publishers, who congregate on sites like WebmasterWorld, who have tried both Google AdSense and Yahoo! YPN. The consensus appears to be that YPN ads offer competitive rates per click but that Google's ads have a higher click-through rate.
The hope in the Yahoo! camp is that the recent Panama upgrade will help level the playing field. A key component of Panama is that it does away with the original Yahoo! model of simply granting choice ad spots to the highest bidding ads. Just as Google has been doing for some time, the new Yahoo! platform takes into account the ad's actual performance.
For instance, let's say that a mortgage company is bidding $0.20 per click for a particular keyword. If a rival lender is offering $0.12 per click but is receiving twice as many clicks per impression, the second ad will be featured more prominently, as it's ultimately more lucrative for Yahoo! and the third-party publisher.
Let's laugh at Yahoo!
Yahoo! isn't chopped liver. However, now the public has to wonder whether Yahoo! got the tiara as the runner-up only because the beauty queen ticked off the judge.
It shouldn't be that way. It acquired Overture, the pioneer in bid-for-placement text advertising. It's obviously no slouch in paid search if it continues to sign up deals like major newspaper consortiums that aren't conflicted when it comes to whom they side with.
However, Yahoo! also has to cope with reality. It's growing slower than Google. Its younger rival sports a market cap that is three times greater. And then we have to wonder whether a hungry Yahoo! is giving Viacom too much here.
Keep in mind that Viacom forced its former CEO to resign this past summer, in part because the market was unhappy with the media conglomerate's Internet strategy. I disagree. I think that Viacom has made some solid acquisitions in Atom, Xfire, iFilm, Quizilla, and NeoPets. Unfortunately, Wall Street thinks only of the one that got away. Viacom was the company that came up short against News Corp.
Let's laugh at Google, too
I don't have the same kind of venom for Google as Seth Jayson does. I heart Google. However, I too have to laugh at how the company appears to be bumbling at the top. You never expect a company with as many moving parts as Google to be perfect, but it's upsetting too many different countries, companies, and content creators these days.
It's taking a toll on Google's once-buoyant share price. It's actually Yahoo! that has delivered superior gains to Google over the past three- and six-month periods. A little humility can go a long way here, but certainly a little mortality is now in order.
It's OK to laugh at Google, Yahoo!, and Viacom. You can laugh at all three at the same time and call it an inside joke. But there will come a point for the chuckling to stop. Then Viacom will have to hope it didn't make a business move out of spite. Then Yahoo! will have to prove that Panama is more than just a country, a hat, or a Van Halen song. Then Google will have to start making friends again.
The joke's too important to be left hanging as the punch line.
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Longtime Fool contributor Rick Munarriz is a huge fan of Google, and it would be his homepage if not for Fool.com taking up that piece of real estate. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
