The effect of Microsoft entering the PPC market, for publishers

[Sharpseo]

From what I've read, it seems like MS is prepared to take a significant hit on their share of advertising revenue to gain market share. Yahoo may do the same once they are out of beta. This should be a serious concern to Google. Microsoft has billions of dollars in profits from their core business flowing in constantly. They can comfortably take a loss from AdCenter, while gobbling up market share all the while.

Theoretically, Microsoft could pay publishers 100% percent of revenue generated by clicks for the forseeable future. They could easily swallow the cost of running the program, in return for long term market share and webmaster loyalty.

What's the incentive to switch to Y or MS, unless they pay more? What will Google's likely response be, to keep publishers? "Smart payments", perhaps? ;) I can see the tagline now "Get paid more for your valuable ad space, we appreciate your business".

Right now Google has the (significant) advantage of a superior ad matching algorithim. Their adsense and adwords user-interfaces also blow away Yahoo for the time being. Can MS or Yahoo eventually match these technological advantages? With enough money and talent, it's possible.

What does this mean for publishers? Good things, trust me :) A brutal and bloody knockdown competition over who can make publishers the most money. That's my theory, anyways.

[digitalpoint]

I agree that Google blows MSN and Yahoo's relevancy algorithms out of the water... But another key factor are advertisers. Google probably has 10x the advertising base (more ads) to draw from than Yahoo. And I'm not even sure if MSN has any advertisers. Without advertisers, you get no ads. Without any ads, no program will knock off Google.

I don't foresee Yahoo or Microsoft ever having more advertisers than Google. People aren't going to give up having their ad on Google's search results (since it's the dominant search engine), but people may be willing to give up having their ad on Yahoo's search results and switch to Google IMO. Best case scenario for MSN/Yahoo would be Google advertisers try MSN/Yahoo out a little bit (but keep their Google advertising campaign).

No one is going to have a chance to knock off AdSense/AdWords until they first have a search engine that is more widely used by end users than Google (and even then it might be arguable).

Personally, I think MSN is getting a little ahead of itself with their Ad Center program. I think they need to get the relevancy of their search engine working first. Then draw users to use it. Then think about the advertising market. If they get greedy and try to monetize on everything prematurely, it will fail.

[Sharpseo]

Good point, Google has a huge lead in advertiser base. Their search engine will continue to draw new advertisers into the search and content networks.

However, it shouldn't be that hard for Microsoft to build a huge sales team to promote AdCenter. I was in advertising sales for a while. The hardest part, by far, is getting a callback from a potential customer. If you call and say "Hi, this is joe from Microsoft, please call me back at 555-1212", my bet is that you'll get a return call. Even if you're calling on Procter & Gamble. If they've never heard of your company's brand name, 98% chance of no call back.

If MS and Yahoo execute well, they can pull in the largest advertisers in a relatively short time period. Supply and Demand also comes into play. If equivalent keywords are maxxing out at $5 on Google content network, and $.10 on MSN, arbitrage will take care of that =)

[digitalpoint]

Agreed... Microsoft has the resources to do it, but I think they are doing much of it prematurely. For example, I have no doubt they can get people to try Ad Center given the marketing resources they have, but if advertiser's ROI isn't what it is with other programs, people will be quick to dump it and not try again later when they have everything ironed out.

I've seen that happen quite a bit with Yahoo/Overture... People try it out, realize they actually spend less (relative to the amount of gain) with AdWords, and just say, "Well, Overture sucks. <click>".

So ultimately Google has two things going for it right now... first they are the dominant search engine, and like it or not... Google is doing AdWords advertisers a favor by letting people use it. For Yahoo (and especially MSN), the situation is currently reversed... Advertisers are doing THEM a favor by trying them out. If it's not working out for whatever reason, advertisers are going to be more inclined to stick it out with Google, since that's where the traffic is. The other thing Google has going for it is end users that click tend to actually convert into customers much more so than Yahoo/Overture. So the advertiser's ROI generally is higher with AdWords.

I'm not saying MSN can't break into the market, but I certainly don't think it's the doom of AdWords/AdSense. I think this is one of the few things where Microsoft isn't going to be able to do it with their massive marketing engine. They are actually going to need a better (and more innovative) product/service offering, which isn't their strong point.

[lorien1973]

I think thats why you get yahoo reps calling YPN sign ups right? They realize they have to massage the relationship to get people to keep using it.

MSN andYahoo's real problem is simple. They aren't search engines. They are portals. I don't go to yahoo to search for stuff, I go there to check mail, or play a game or read the news. I go to MSN..well, I never go to MSN to be honest. When you go to google; all you can do is search for something. No frills, no distractions on the page. The focus of the page is apparent. Not so much with yahoo nor MSN

[ly2]

I agree that Google blows MSN and Yahoo's relevancy algorithms out of the water... But another key factor are advertisers. Google probably has 10x the advertising base (more ads) to draw from than Yahoo. And I'm not even sure if MSN has any advertisers. Without advertisers, you get no ads. Without any ads, no program will knock off Google.

I don't foresee Yahoo or Microsoft ever having more advertisers than Google. People aren't going to give up having their ad on Google's search results (since it's the dominant search engine), but people may be willing to give up having their ad on Yahoo's search results and switch to Google IMO. Best case scenario for MSN/Yahoo would be Google advertisers try MSN/Yahoo out a little bit (but keep their Google advertising campaign).

No one is going to have a chance to knock off AdSense/AdWords until they first have a search engine that is more widely used by end users than Google (and even then it might be arguable).

Personally, I think MSN is getting a little ahead of itself with their Ad Center program. I think they need to get the relevancy of their search engine working first. Then draw users to use it. Then think about the advertising market. If they get greedy and try to monetize on everything prematurely, it will fail.

MSN SEARCH > GOOGLE SEARCH

google results are FULL of spam.

[digitalpoint]

MSN SEARCH > GOOGLE SEARCH

google results are FULL of spam.I would argue the exact opposite. MSN search results are so easy to manipulate with SEO that it's become a bit of a joke IMO.

[Sharpseo]

I've seen that happen quite a bit with Yahoo/Overture... People try it out, realize they actually spend less (relative to the amount of gain) with AdWords, and just say, "Well, Overture sucks. <click>".

I definitely agree with that. Google is light years ahead of anyone else in search algos, advertising systems, and ad relevancy matching. I am one of those people who despises using Yahoo search marketing. I filled out a YSM customer survey recently, in which I tore them a virtual new one regarding their user interface. It's incredibly clunky and awkward compared to Adwords, in my opinion. My marketing does seem to provide a higher ROI with Adwords, though it's not a huge sample size.

The main point is that if/when MS or Yahoo do eventually offer an effective, competetive content advertising product, it will be good for publishers. More of them fighting for our business = good.

[Web1.in]

I personally feel that MS might not enter into ad market or if they are planning, then they might start something with Yahoo...

I feel this because, recently MSN and Yahoo have decided to come up with single messenger tool which can be used for both yahoo and MSN..

So this can be first step towards "make both happy" relationship..so I doubt MS would like to break it by launching another publisher network in competition with Yahoo....

But that's my personal thought..the outcome might be different..

Regards,
Deep

[JEET]

What if they also join to distribute ads providing more exposure for advertisers ?
I read somewhere that MSN gets ads from some other SE as well .
Is that right ?

Forum users will also enjoy promoting this program in sign for incentives . I see some chitica ads already .

Regards
jeet
P.S . you do see ads in your yahoo mail also . Be it a portal and not a SE.
You go there more often you go to google .

[mdvaldosta]

People said the same thing about Microsoft when they came out with the XBox. They sold the boxes below cost and took a big loss on them. It was said (by me also) that nobody would buy an XBox when you've got PS2 with all the market share. Lookie what happened in a matter of 2 years. I put my Playstation2 in the closet and have 2 Xboxes now.

I'll put my money on M$, that if they get into the PPC market they'll have close to the same market share as Google in a couple years.

[aworldh]

Microsoft has a cash pile believed to be worth about $50 billion dollars. Shareholders have always wanted the company to give some of the cash back, and Microsoft did finally start paying a dividend in recent years.

But here it sounds like the company could use some of that to bankroll a campaign to get users to switch search engines; once its advertising network gets under way, some of its profits could take over funding incentives.
Microsoft will keep building its search and prepping its advertising network for debut in the US and elsewhere.Until then, Gates would like everyone to pay attention to Google.
Once competition does really begin it will be a good fight.

[t10host]

I think the fight will benifit to us

[aworldh]

I think the fight will benifit to us
yes, very true. As search becomes competitive and people realize that other offerings are as good, or are even significantly better, there will be price competition.

We can expect to get some free content or a check, or some incentive to use a different search engines.

[JEET]

yes, very true. As search becomes competitive and people realize that other offerings are as good, or are even significantly better, there will be price competition.

We can expect to get some free content or a check, or some incentive to use a different search engines.

How do you think they will "TRACK" who's using which search engine ?
Some login may be ? ( takes time to login ..)

Well then why are they fighting for the shortest time while searching ?
( Search took 0.8 seconds...)

Regards
jeet

[kc3]

All Microsoft needs to be able to do is convince the right people (people that forward others and help out online) that Microsoft's program is better, than it works like a virus from than on. Why do you think Google's is so big and growing? I don't see much advertising from them except for the ads other's are showing (on the adsense ads) and people telling others it's better. And you don't actualy need many to do that.

If I was Microsoft I'd target people who don't know much about online advertising first and get them started with it. Besides, even though Google is so big, don't many of their advertisers advertise in more places? There's no harm in it and if Microsoft pays more to publish therefore possibly having more advertisers or the potential for it, there's at least an reason to try it out. Nobody ever said anything about advertisers having to switch completely.

[digitalpoint]

All Microsoft needs to be able to do is convince the right people that generaly forward others that Microsoft's program is better, than it works like a virus from than on. Why do you think Google's is so big and growing? I don't see much advertising from them except for the ads other's are showing (on the adsense ads) and people telling others it's better. And you don't actualy need many to do that.Right... word of mouth is the best advertising you can have. Microsoft will not have that luxury though unless they can produce a better product/service AND have the dominant search engine. It's definitely an uphill battle for Microsoft.

[kc3]

That is for certain, but very possible, and with the money they have I'm sure they also have all the help they need to do it. It's just a matter of how much time and money they want to invest into it.

[JEET]

With a huge list of advertisers or with only a few but if they can get "Webmasters" displaying their ads then google is left with and ad space of 4-7 ads only , that's on SERP's .
I don't see any other way of capturing "share".
Eventually the advertiser list will also increase because of ad display on many websites .

No matter what "Publishers" are going to be benefitted specially if their is some "referrer" incentive as well .

Regards
jeet

[aworldh]

How do you think they will "TRACK" who's using which search engine ?
Some login may be ? ( takes time to login ..)

Well then why are they fighting for the shortest time while searching ?
( Search took 0.8 seconds...)

Regards
jeet
If i get paid to use search engine, i would'nt have care about how much time it takes for search results to show and microsoft have very nice passport authentication system already in place.
I think this is the only way microsoft can take over from google by giving the cash back to its users.And they have already started some experiments on this feature.This fight is really going to be very exciting in the future.

[kc3]

Yes, and I'm sure most of us will be carefuly following up on it. :)

[nickr]

Advertisers want their ads shown to 100% of their target market. If Google has 80% of the SE market, then advertisers are missing out on 20% of their potential customers if they only place ads on Google search results.

Since it's pay per click anyway, advertisers have nothing to lose and all to gain by advertising on ALL the search engines. Therefore, search engine dominance won't affect Yahoo or Microsoft's ability to get them.

At least that's how I see it.

[JEET]

If i get paid to use search engine, i would'nt have care about how much time it takes for search results to show and microsoft have very nice passport authentication system already in place.
I think this is the only way microsoft can take over from google by giving the cash back to its users.And they have already started some experiments on this feature.This fight is really going to be very exciting in the future.

What feature ?
Paying back using their search engine ?
Or
For using their search engine ?

Where did you read that something like this is on list ?
And seriously there are better ways of MSn taking over google's market .

Regards
jeet

[liquidboy]

i agree with nickr , advetisers we will need to communicate with all engines !!! Well atleast thats what ill be doing..

Understand that microsoft are in it for the long run, there money will be used to last the distance. Thats how they beat out there competitors, endurance!!!

[Sharpseo]

I was reading the Yahoo Publishing Network forum today. All the publishers in their beta seem to indicate that they're getting high payouts. I still haven't gotten my invite yet, anxious to try it out though. Obviously things will change once more advertisers and publishers are in the mix. However, they will have to keep payout % relatively high to get webmasters to switch from adsense.

It should mean better partner support from all parties, too. More competition means they have to work harder in all areas to keep your business.

[aworldh]

What feature ?
Paying back using their search engine ?
Or
For using their search engine ?

Where did you read that something like this is on list ?
And seriously there are better ways of MSn taking over google's market .

Regards
jeet

I read some where about Gates plan for future search engine.
"The company could use some of that to bankroll a campaign to get users to switch search engines; once its advertising network gets under way, some of its profits could take over funding incentives".

"Amazon.com offers a small percentage discount on its web site for users of its A9.com search engine and toolbar. After a certain number of searches go through A9, users become eligible for a 1.57 percent discount on their purchase. That could pale in comparison to what Microsoft might offer."

[JEET]

Ok, so that was what you meant .
I thought that you meant regular search .

And I still think that by "switching search engines" Gates meant "switching PPC programs of search engines". I say this because to provide some sort of a discount coupon or something similar MSN will also have to start an online credit card processing system or a JV . Plus a huge list of products will be required along with consent from product owners that they want to offer discount if the click is from MSN .

It is very possible but "At this point of time" this system could have some negative effects on MSN as a company . It would not only require a huge investment but also a large "working capital" depending on the number of products .

They sure got "money" but it is not just to throw . ( sufferring loss for some "Planned" time is different) .

Regards
jeet

[aworldh]

Ok, so that was what you meant .
I thought that you meant regular search .

And I still think that by "switching search engines" Gates meant "switching PPC programs of search engines". I say this because to provide some sort of a discount coupon or something similar MSN will also have to start an online credit card processing system or a JV . Plus a huge list of products will be required along with consent from product owners that they want to offer discount if the click is from MSN .

It is very possible but "At this point of time" this system could have some negative effects on MSN as a company . It would not only require a huge investment but also a large "working capital" depending on the number of products .

They sure got "money" but it is not just to throw . ( sufferring loss for some "Planned" time is different) .

Regards
jeet

May be you are right.But Gates is really thinking very seriously about "Google" and may come up with some surprises.

[JEET]

May be you are right.But Gates is really thinking very seriously about "Google" and may come up with some surprises.

That's right ... It sure is going to be a nice one at least for publishers .

Regards
jeet

[revenow]

I wouldn't understimate MSN. They have plenty of media relationships that they can integrate into this program to get it off it's feet. Their resources are endless. It may not overtake G anytime soon but you can bet Y and MSN will eventually grab a decent chunk of market share. The business world is full of stories of underestimated companies that went on to dominate their competition. One look no further than Google or Microsoft for examples.

[Sharpseo]

Remember that old scam email that said if you forward this to x number of people, Microsoft will pay you $x for each one? Wouldn't it be ironic if MSN actually did end up paying people in some way for using their search engine? Kinda similar, anyways... I actually got that email the other day from someone, can't believe it's still going around.