Bronte Media

Sometimes, it seems, chaos is better.

There hasn’t been much attention given to Yahoo’s decision to stop bidding upon trademark terms (given the mania over comments from Google’s CFO, you would have thought that similar attention would be paid to this decision by Yahoo as I would imagine it would have a material impact on their revenue).

Brian Smith has an excellent analysis on what it means for comparison shopping engines, the largest advertisers on Yahoo search marketing *overall* (OK, eBay is but they are nearly comparison shopping).

Technically they shouldn’t be allowed to bid, as Brian explains. But they are (e.g. do a search for ‘ipod’).

I am sure it is an unintended consequence borne out of over-zealous lawyers (both pressuring Yahoo to change their policy, and internal Yahoo lawyers forming it). But to technically cut off your largest advertisers at the knees and significantly reduce their ability to advertise with you (given that trademark terms represent such a significant portion of they keyword portfolios) seems like a very bold move indeed.

Not to say that no one will advertise on those keywords, just that bid prices will be reduced due to lack of competition and also because comparison engines bid according to a different, more favorable framework (they buy a click for say 50cents and get the consumer to click on two merchant links which generate 40 cents each (rough but representative economics)).

Interesting to see how this plays out. Or rather, interesting to see how long it takes Yahoo to ammend their policy on comparison engines.