Yahoo in the US and Canada has signed an advertising agreement with Google and is now preparing to include Google ads in it’s Search Results. This comes after years of Yahoo traffic levels falling in the shadow of Google. And from my own experience trying to maintain stable conversion on Yahoo is getting harder.

On Google’s side they see it as beneficial to the Yahoo! SEM which has been struggling for quite a while now. All adprices will continue to be set by competitive auctions. Yahoo are also going to see benefits. The more Google ads are shown, the more money Yahoo makes because of how much more expensive it is to run SEM on Google. Also it will help where Yahoo struggles with long-tail search queries.

Microsoft however are not to happy about the deal – this will bearly leave Live Search with a 20% share of a the SEM market. Whilst Google have been very specific that this will not mean elimination of a competitor from the market or increase Googles share or search traffic there are still fears Googlisation (Google Monopoly) where Google will be able to charge monopoly prices to advertisers. The issue has been debated alot in terms of commerce, but at the end of the day “It