The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
The deal will increase opportunities for exposure across the Yahoo network. But despite the growing buzz on paid search, it remains just one of many marketing vehicles.
Yahoo’s announced $1.6 billion acquisition of paid search firm Overture Services Inc. focuses still more attention on the burgeoning online search market and intensifies the ongoing battle for share among major search providers. But what does it mean for the retailers and others who use online search as a marketing tool?
“For the retailer, this presents new kinds of opportunities for advertisers to reach new kinds of audiences on the Yahoo front,” says Matthew Berk, analyst with Jupiter Research Inc. “Yahoo has all manner of verticalized search vehicles such as Yahoo auctions and Yahoo shopping, and now that Overture will be part of the fold they’ll be selling that. So there will be an increased opportunity to get additional kinds of exposure across the Yahoo network. I see that as a positive thing.”
Firms that specialize in providing search optimization services versus paid search results for clients say they see a positive spin from the Yahoo acquisition as well. “This should help educate people a little more,” says Chris Winfield, president of 10E20 Web Design LLC, which specializes in designing sites for small businesses as well as optimizing them for search. “Anywhere you go, you’re going to see ‘Yahoo acquires Overture.’ So for the first time, a guy who owns a sneaker store is going to know what pay per click means. He’s going to look into it to find out what it costs, but a pay per click campaign can quickly deplete a smaller business`s budget. When he finds that out, he is going to look for alternatives.”
If the snowballing size and importance of the commercial search market as underscored by the Yahoo announcement raises any question among online retailers about the role of natural or free search going forward, many firms that formerly specialized in natural search services have answered it by adding to that offering other forms of online marketing.
“Free search will always be important because 75% to 80% of searchers still put more credibility on free search results, so you need to appear there. But having a well-rounded campaign is important, so you’d better be planning on doing some spending in multiple areas and not just focusing on one,” says Lisa Wehr, president of search marketing firm OneUpWeb.
For that reason, Wehr’s company, which started out in algorithmic search optimization, has also for the past year provided services such as keyword buys on Overture and Google AdWords, as well as facilitating XML feeds, in addition to optimization services. “As the technology changes, you’d better be changing with it,” she says. “There are no longer search engine optimization companies, there are search engine marketing companies, because optimization is a service just like keyword buys and XML feeds.”