June 8, 2004

Even if the two companies are acknowledged competitors, Yahoo has begun advertising on Google, using Google's AdWords program.

AdWords works by having clients bid on keywords that can be used to query search engines. These keywords, when searched, will cause Google AdWords to display text ads associated with the content of the search.

The keyword which Yahoo is using to advertise on Google is "RSS." RSS, which stands for Rich Site Summary, is a format for, according to XML.com, "syndicating news and the content of news-like sites." When users search the term RSS in Google, Yahoo's keyword related advertisement garners the top AdWords position.

If Yahoo's AdWords ad is clicked, the user is taken to a landing page for Yahoo Shopping, Yahoo's shopping portal. The landing page is a Yahoo Shopping SERP.

In Google's AdWords program, clients who won the keyword bid must pay the cost for the click to Google. This applies to Yahoo as well.

MarketingVOX suggests "the campaign may be an effort at keyword arbitrage. In keyword arbitrage, Yahoo would pay for clicks with the expectation that the Yahoo advertisers will pay more once the original Google visitor arrives."

Who says competitors can't work in unison to benefit each other. Google is receiving money each time Yahoo's RSS ad is clicked.

Meanwhile, Yahoo has the opportunity to sell items and gain click revenue from advertisers on their landing page, once the user reaches Yahoo's ad destination.

Source: Web Pro News

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