It's official. The planet itself has turned on GooHoo.
The World Association of Newspapers, a Paris-based consortium of mostly European newspapers, is opposing the revenue-sharing deal between Google
At first brush, the complaints don't seem to make a whole lot of sense. I'm not talking about the geographical makeup of the conflict. We live in a global Web economy, and it's easy to fathom a stateside deal bleeding into the world arena as online users visit foreign newspapers. No, the key takeaway here is that we're now talking about content publishers suggesting that they will make less money from online advertising as a result of Yahoo! outsourcing its paid search ads to Google.
These fears appear to contradict those raised by the Association of National Advertisers earlier this month, suggesting that sponsors will have to pay more for online advertising if regulators allow Yahoo! to populate its pages with Google targeted text ads.
How can both sides complain? If the advertisers feel that they will have to pay more, and the publishers fell that they will make less, it can only mean one thing:
Oh, you greedy little Google.
Ad it up
Google serves up ads on third party sites as part of its popular Google AdSense program. It's a win-win-win deal. Google gets to tap into its massive inventory of unviewed ads as the world's leading online advertising company. Publishers get a wider selection of sponsors without the sales team legwork. Consumers win, too, as they are treated to more relevant ads given Google's ad-targeting technology.
Google is pretty generous on that front. It sold $1.66 billion in ads on third party sites -- big and small -- this past quarter. It returned $1.32 billion of that -- or a healthy 79.5% chunk -- back to the publishers.
If advertisers feel that they will pay more and publishers feel that they will make less, the implication is that Google will shrink its payout rate, pocketing more in the process. It's certainly possible, but let's not assume that the presence of Yahoo! running a fledgling copycat of Google's AdSense on a much smaller scale is the only thing keeping Google from taking a bigger piece of the action.
Publishers have options. They can -- and do -- turn to ad products offered by companies like ValueClick
Perhaps more importantly, this should be a wake-up call to Microsoft
Mr. Softy to the rescue
Since last year, I have suggested that providing a mainstream third party ad outsourcing platform is an opportunity for Microsoft to exploit. Yes, Microsoft serves up ads for sites like Facebook and Digg, but it really needs to reach out to the publishers of all sizes the way that Google has (and Yahoo! has tried to, but with little success).
It would have to offer more than Google -- perhaps even 100% or more, initially -- because its thinner ad bench is unlikely to be as lucrative as Google's sponsorship rolls. It would be worth it, especially if it finds publishers leaving Google for the sake of Microsoft's platform.
Can you imagine seeing as many "Ads by Microsoft" or "Ads by MSN" as you do "Ads by Google" as you scour the Web? It can happen. Microsoft simply needs to seize this opportunity instead of rolling into the fetal position.
Google is big, powerful, and magical. So what? It's not perfect.
If Microsoft isn't going to pick at Google's biggest AdSense publishers like Time Warner's
This isn't about Google. This isn't about Yahoo!. This is about you, Microsoft. Opportunity is knocking. Answer it with a shotgun in your hand, and come out firing.
The world apparently needs an antidote to Google. So do you.
Other ways to answer the door when investing opportunities knock:
Longtime Fool contributor Rick Munarriz wonders why everyone is hating on Google these days. Let him know in the comment box below. He does not own shares in any of the stocks in this story. He 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.
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