Finally, some coverage of the Yahoo API launch that focuses on the Overture APIs. This internetnews.com article makes some nice points such as:
If the search engines' pay-per-click ad services were restaurants, Google would be McDonalds: fast and cheap; Yahoo would be Chili's: serving a limited number of patrons, offering a wide variety of higher-priced meals and not promising you a table.
Fun analogy, but just not very accurate... The rest of the article contains several questionable points brought up in support of this thesis that Overture is not really self serve.
"With Google, your ads are running within 10 minutes. With Overture, it takes a call or an e-mail to a sales rep. There's a bit of a hurdle getting in," said Jupiter Research analyst Gary Stein.
Huh? Since when do you have to call Overture or even email them to get ads running? While Google often gets ads running faster, Overture approvals usually happen automatically in under 24 hours. I've argued before that Overture is actually easier than Google for smaller advertisers, as well since relevancy is not a factor in positioning.
This breakdown of revenue makes no sense to me either:
In 2004, Yahoo made more than $3 billion in marketing revenue. Yahoo doesn't separate contributions from its Overture division, which it acquired in 2003. But Gartner analyst Denise Garcia estimates that Overture pay-per-click ads contributed around 20 percent of its revenue in 2002.
Is 2002 the latest data Gartner has? PPC ads were barely a factor way back then. They weren't even a part of Yahoo and they created 20% of revenue. Imagine what they are doing now that they've been folded in. Personally, I think it's very likely that Overture contributes 40+% of Yahoo's profits to the bottom line. It's undoubtedly the most successful and underrated corporate acquisition of the internet age.
Finally I wonder if this quote was worked in to fit with the story line:
"Yes, Google captures all of the small advertisers, and Overture has traditionally done better with the bigger advertisers," Stein said. "On the other hand, Google has had a really bad reputation for customer service, whereas Overture has a dynamite reputation. They're very responsive to problems; if you're extremely sophisticated, they let you alone; if you're new, they work with you. That takes a lot of resources, but these are bigger accounts."
Google captures all of the small advertisers and Overture does better with the big advertisers!?! The "long tail" may be long, but it couldn't explain why Google's revenue is $4B and Overture's is what, a 1/3rd of that? Is there any evidence that the largest spenders are under-represented on Google? I think Amazon, eBay, NexTag, Shopping.com, etc are spending much more on Google than Overture... As for the "dynamite" reputation of Overture, I wonder where that comes from? I don't think Overture has a bad reputation, but I've never heard it described as "dynamite" either...
¶ 3/05/2005
