Yahoo Search Marketing has just announced that after 6 months of internal deliberation on the subject, they are opening up their advertising platform to allow direct linking by affiliates and other advertising partners.

Up until this announcement, it was Yahoo’s policy that you couldn’t send sponsored traffic to a site that you did not own, even if you had a working affiliate agreement with the merchant to do so. This policy has not always been implemented across the board; I have been able to get direct link ads up in YSM for years, but this policy would often rear its ugly head at the worst times, after all the work was done. Yahoo has shut down entire accounts of mine in the past in an effort to enforce this ill-advised policy. I am happy to announce they have come to their senses.

This represents a significant shift and CJ is bragging that they had a lot to do with this policy change. What role CJ has played is not clear, but they announce it as follows:

After more than six months in the making and much customer feedback and testing, we are pleased to announce that Yahoo! Search Marketing (YSM) has recently updated its editorial policies and will now allow U.S. publishers to direct link to their advertisers. In the past, YSM’s editorial policy prevented publishers from linking directly to their advertiser partners and required that traffic be sent first to the publisher’s Web site. The new policy eliminates this restriction and opens a much broader search marketing opportunity for publishers. 

This YSM policy change is the result of a strong relationship between Commission Junction and YSM. We have spent more than six months working with YSM to enact the new editorial policy and are very pleased that this effort has resulted in changes that are sure to create opportunities for our publishers and advertisers.

CJ will no doubt win big points for helping to make this happen. There are many affiliates who spend precious time building out landing pages or redirect systems to get around the old policy. This will certainly affect the way many PPC affiliates do business.

I never understood their old policy and how Yahoo could justify leaving so much money on the table. Only in a huge corporation could fear of legal actions, cause such an irrational policy.

Yahoo is now poised to woo Google-weary affiliates after numerous “quality guidelines” slaps against affiliates in the Adwords format. Many recent studies have shown the Google slaps have been a boon for small PPC marketing platforms, which have absorbed many affiliates looking to recoup lost traffic. Yahoo can now attract these advertisers with a more permissive policy than Google. Hopefully this will give them a competitive advantage, and show Google that they “slap” affiliates at their peril. ;-)

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In a surprise unsolicited bid this morning, Microsoft offered $44.6 billion for the purchase of Yahoo! Inc. This comes out to just over $31 a share, and it seems that Microsoft is attempting to take advantage of the soft stock market. As the news hit, Yahoo! stocks were immediately up almost 50%, but what does this all mean to the affiliate marketer?

Let’s take a closer look at the deal being offered first. Microsoft’s press release states:

Microsoft Corp. (Nasdaq: MSFT) today announced that it has made a proposal to the Yahoo! Inc. (Nasdaq: YHOO) Board of Directors to acquire all the outstanding shares of Yahoo! common stock for per share consideration of $31 representing a total equity value of approximately $44.6 billion. Microsoft’s proposal would allow the Yahoo! shareholders to elect to receive cash or a fixed number of shares of Microsoft common stock, with the total consideration payable to Yahoo! shareholders consisting of one-half cash and one-half Microsoft common stock. The offer represents a 62 percent premium above the closing price of Yahoo! common stock on Jan. 31, 2008.

    “We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” said Steve Ballmer, chief executive officer of Microsoft. “We believe our combination will deliver superior value to our respective shareholders and better choice and innovation to our customers and industry
partners.”

    “Our lives, our businesses, and even our society have been
progressively transformed by the Web, and Yahoo! has played a pioneering role by building compelling, high-scale services and infrastructure,” said Ray Ozzie, chief software architect at Microsoft. “The combination of these two great teams would enable us to jointly deliver a broad range of new experiences to our customers that neither of us would have achieved on our
own.”

Let’s discuss how this all affects affiliate marketers. If this deal goes through it could decrease the competition within the search market, which is generally a bad thing in my mind. This means that the impact of one company’s change in policy could more severely damage affiliate marketers, as Google did with Google Slap #1 and Google Slap #2. No one knows if there will continue to be further slaps from Google.

That said, I would much rather see Microsoft purchasing Yahoo! Inc. than Google. At least there would still be 2 very large players in the search market. Microsoft would be able create a balance to the power of Google. Yahoo’s Publisher Network would enhance Microsoft’s attempts to expand it’s content network and technology.

One question that comes up on the practical side of things is whether Microsoft would attempt to consolidate it’s own search under the Yahoo brand or vice versa. Since Yahoo has a much larger market share than Microsoft, I imagine that would be the case. This makes less work for affiliate marketers who spend a good deal of time modifying campaigns for three separate search engines at present. The downside to this is increased competition within the PPC sphere driving costs up.

It still remains to be seen whether Yahoo! Inc. will take the unsolicited offer made by Microsoft, but they sure did try to make the deal pretty sweet! – a 62% premium on the current stock price will be a hard offer to decline. We will just have to wait and see.

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