Yahoo teams up with Google on contextual advertising

By on February 7, 2013, 10:00 AM

Yahoo has announced that it will start serving advertising from Google’s AdSense and AdMob services on various of its own web properties and certain co-branded sites. In a blog post announcing the deal, Yahoo said, “By adding Google to our list of world-class contextual ads partners, we’ll be able to expand our network, which means we can serve users with ads that are even more meaningful.”

The company has been struggling to attract more advertisers in recent years, with revenue falling for three consecutive years before registering a small gain last year. The tie-up may indicate some insufficiency of Yahoo’s alliance with Microsoft, which currently handles most of its larger search-driven advertising as part of a long-term deal signed in 2009, but it’s unclear if it will lead to something bigger.

Right now the non-exclusive deal with Google will be limited to contextual ads, neither display nor search, and will appear on Yahoo's sites for finance, news, sports and autos, said Sara Gorman, a spokeswoman for the company. Analysts have been predicting that CEO Marissa Mayer's old ties with Google might eventually lead to a closer relationship with Yahoo.

Google will retain part of the revenue generated from the ads shown on Yahoo’ sites, of course, as is the case thousands other websites. The revenue split with Yahoo wasn’t disclosed.

The move comes four months after Mayer brought in Henrique De Castro, a top ad executive from Google, to serve as the company’s new chief operating officer.

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