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Yahoo! just announced tonight that they acquired Blue Lithium for $300M in an all cash deal. This is an excellent move by Yahoo! to pick up one of the leading companies in the performance marketing space. Blue Lithium boasts a data driven targeting platform that is one of the best in the industry. In light of the recent multi-billion dollar acquisitions of Doubleclick ($3.1B - $300M revenue) by Google and aQuantive ($6B - $442M revenue) by Microsoft, this appears to be a excellent deal for Yahoo!

Update: It is estimated by Mashable.com that Blue Lithium’s revenue for 2006 was $100M+, further evidence that this was a good deal for Yahoo!

Coverage from around the Web:

• Mashable: AD FRENZY: Yahoo Acquires BlueLithium for $300 Million Cash - Estimated Revenues of $100M+ in 2006
• TechCrunch: Yahoo! Acquires Ad Network BlueLithium
• VentureBeat: Yahoo to acquire advertising company, BlueLithium, for $300M - Lists Blue Lithium as #5 in reach with 66%

Filed by SWong at 3:25 am under Interactive Advertising
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A recent research report from Microsoft (NY Times article) claimed that approximately 11% of search results and as much as 30% of some competitive search results contain Internet Content SPAM. Spammers create these pages for the sole purpose of profiting from advertisements by fooling the search engines (i.e. Google, Yahoo!,etc.) to rank their pages well. Typically these SPAM sites are computer generated to create huge numbers of pages each targeted to rank well with a specific keyword.

There are many strategies, but typically these SPAM sites are computer generated to produce a huge numbers of pages, each targeted to rank well with a specific keyword. I’ve found several SPAM content generator scripts (YACG, RSSGM, WP AutoBlog, & MyGen) on the web that take content snippets from a variety of articles cribbed from across the web. These scripts auto generate content by jumbling content snippets into search engine readable pages using statistical algorithms such as Markov Chains. Add a custom template to make the site unique and create an internal link network between pages within the site.

Once the site is built, Spammers create huge numbers of bogus blogs (Blogger) and webpages (from free hosting sites such as Yahoo!’s GeoCities) to build links directed towards the Spam site. This confirmed by the Microsoft study where most free web hosting and free blog sites have over 70% Internet Content SPAM.

Internet Content SPAM is a huge problem for Search Engines because it degrades the quality their search results. As Albert Einstein famously said “We can’t solve problems by using the same kind of thinking we used when we created them.”, it is tough for Search Engines to identify Internet Content SPAM. Typical approaches entail usage of filters and/or blacklists when a SPAM signature or domain is discovered. This makes Internet Content SPAM one of the most vexing issues for this generation of Search Engines.

Filed by SWong at 6:25 am under Interactive Advertising, SEM, SEO, Search
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Today, Microsoft officially open the doors to their new AdCenter (MSIE only) to new accounts.  They are also in the process of replacing 100% of Yahoo! Search Marketing ads on all of their entire search advertising network.

With this announcement, Microsoft has one upped Yahoo! and beat them to the finishline to release their respective new SEM ad platforms.

Coverage from across the web follows:

• Threadwatch: AdCenter Open to All…
• Search Engine Roundtable: Microsoft adCenter Officially Launches: 100% adCenter Ads at MSN Search & Live.com
• SEO Book: MSN AdCenter Live to All
• Search Engine Watch: MSN adCenter Officially Launches & Changes Name to Microsoft adCenter

Filed by SWong at 1:19 am under Interactive Advertising, SEM
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Search Engine Roundtable reports the Washington Post has a very good article about a class action suit against Yahoo! for syndication fraud. The interesting thing is Google also does similar practices as outline by the complaints/claims of the suit. I wonder if there will be another suit against Google as well.

Filed by SWong at 7:15 am under Interactive Advertising, SEM
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As reported by Forbes, Yahoo! is finally rolling out the test versions of their version of the Google AdWords ranking algorithm, called Project Panama. Like Google, Yahoo! Search Marketing advertisements will be ranked on keywords searches by the bid amount advertisers are willing to pay for keywords and the click index (measure of relevance) for the ad. Its about time!
If you have been following Google’s financial performance as compared to Yahoo!’s over the past couple of years, you’ll notice that Google’s margins have far exceeded Yahoo!’s. Back in October 2005, Google released a new AdWords quality and relevancy ranking algorithms that have contributed to the higher than expected Q4 earnings for Google and widening of margins as compared to Yahoo! Essentially Google AdWords is tuned to maximize their revenues.
As a Yahoo! stockholder and a former employee, I have been continually frustrated by the lack of progress Yahoo! has had in whipping the former Overture division into shape. The new Yahoo! Search Marketing platform was rumored to have been beset by Microsoft Vista-like delays and setbacks for almost two years. According to the Forbes article it is estimated this new platform will be released on the second half of 2006.
Here is my wish list for the new Yahoo! Search Marketing Platform:

1. A|B Testing - The currently Yahoo! doesn’t allow you to rotate more than one advertisement at a time. That means I can’t test and improve my ads on the Yahoo! platform. Since I am also restricted by Yahoo!’s strict 3-4 business day editorial review this makes it virtually impossible to test ads in a meaningful way. If Yahoo! is going to factor in the click index into the ranking the system should encourage testing.
2. Open Up the API - Unlike the Google AdWords API, access to the Search Marketing API is very restrictive. Access to the API typically requires an NDA, advertiser review (they review what you plan on doing with the system), a lengthy legal contract, and negotiating transactional charges.
3. Faster Automated Editorial Reviews - Google AdWords has automated system to flag editorial issues. With Google AdWords your campaign can be up and running with your ad within 30 minutes. There is no reason why Yahoo! shouldn’t have a similar system. The manual editorial process on Yahoo! Search Marketing is way too slow and inconsistent.
4. Real Time Reporting - Google has the ability to report your stats from your campaign at near real time (~15 minute delay). Yahoo! on the other hand requires a 24 hour delay.
5. Opt-Out/Exclude Sites - I would like the ability to exclude or at least bid separately for my ads showing up on low performing parking pages.
6. Improve Targeting Capabilities - Add the ability to target by age, gender, occupation, zip codes, etc. MSN AdCenter have announced they will have this functionality
7. Integrate Yahoo! Publisher Network - I would like the ability to bid on separately for their content network.

BTW… I feel this new search marketing platform has a potential to have a huge positive impact to Yahoo!’s bottom line. As a result I remain long on YHOO as we speak.

Filed by SWong at 6:26 pm under Interactive Advertising, SEM
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I just finished reading Ben Edelman’s great detective work to uncover click fraud scheme utilizing Yahoo! Search Marketing: “The Spyware - Click-Fraud Connection — and Yahoo’s Role Revisited“. This is a great piece and well worth the read for anyone who purchases advertising on the web.

I’d like to expand upon Ben’s post. The assertions of “Syndication Fraud” and the “Pay Per Click Promise” with respect to Yahoo! is much more widespread than what is reported. When an advertiser purchases pay per click advertising on Yahoo! Search Marketing or Google AdWords the advertiser is largely expecting and intend to buy highly targeted contextually relevant search engine advertising. Yahoo! is breaking this “Pay Per Click Promise” by allowing these ads to be placed on pages other than search results. This type of Syndication Fraud is running rampant across the web particularly among parked pages (where domain speculators purchase domain names for the sole purpose of monetizing the natural traffic on them) and dynamic doorway pages (dynamically generated pages are created to fool search engines so they can show up on natural/organic search results).

The reason for this is is search based PPC ads (Google AdWords, Yahoo! Search Marketing, etc.) command a much higher cost than the equivalent content based search ad (Google AdSense, Yahoo! Publisher Network, etc.). Often time the search based ad commands as much as a 5-10X premium over the content based advertisment. The incentives are obviously there for the aspiring domain parking and black hat search engine optimizers (SEO).

The end result shortchanges advertisers who will receive lower quality clicks as a result of these practices. I have first hand experience with this since I have found my advertisements purchased on the Yahoo! Search Marketing keyword for “MBNA credit card” show up across the web on parking pages that have nothing to do with the keyword that I have purchased.

Just check out the following example site (parking page): http://www.m2card.com/

My site (creditcardjungle.com) is listed as the 8th result on the page even though the advertising buy was strictly for search keywords only. Definitely a case of syndication fraud.

Or this one: http://lb5.netster.com/index/Site=bWFkNGFkcy5jb20%3D

This is an example of Google Syndication serving up the ads. Where is contextual placement that I have purchased?

I believe that Yahoo! (& Google) has a contractual responsibility to deliver what was promised to their advertising customers. I feel shortchanged!
Stanley

Filed by SWong at 6:43 pm under Interactive Advertising, SEM
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