Yahoo! Search Marketing

Yahoo! Search Marketing (searchmarketing.yahoo.com) is a keyword-based “Pay per click” or “Sponsored search” Internet advertising service provided by Yahoo!.

Yahoo began offering this service after acquiring Overture Services, Inc. (formerly Goto.com) (overture.com). Goto.com was an Idealab spin off and was the first company to successfully provide a pay-for-placement search service following previous attempts that were not well received.

In February 1998, GoTo offered advertisers the option of bidding on how much they would be willing to pay to appear at the top of results in response to specific searches. The bid amount was paid by the advertiser to Goto every time a searcher clicked on a link to the advertiser’s website. By July 1998, advertisers were paying anything up to a dollar per click.

GoTo’s business model was based on the idea that its paid listings would make it more relevant than other services, especially for general searches, and web sites that pay more are probably better sites. A similar service had been offered by Open Text in 1996, but this precipitated outcries and bad publicity because searchers at the time did not want the search process more commercialised.

In contrast, GoTo’s pay-for-placement model was very successful. Commentators theorised that the web had matured in the intervening two years, and these type of economic models were more acceptable since the web was no longer just a place for academic research, but also a place for buying products. GoTo founder Bill Gross speculated at the launch that GoTo would succeed because, as a relatively new service, it had no reputation to taint with paid listings, unlike Open Text.

On October 8, 2001, Goto.com, Inc. renamed itself Overture Services, Inc. GoTo’s chief operating officer Jaynie Studenmund said “We also felt it was a sophisticated enough name, in case our products expand.”

Through partnerships, Overture enabled portals such as MSN and Yahoo! to monetise the hundreds of millions of web searches made each day on their sites. Indeed, these partnerships proved highly lucrative, and in a period otherwise marked by dot-com failures, Overture became a substantial profit driver for portals like Yahoo!

This success enabled Overture to acquire web sites such as AltaVista and AlltheWeb.

In 2003, Overture was acquired by its biggest customer, Yahoo!, for $1.7 billion. The old brand name of Overture has now been phased out as Yahoo! re-brands all of its products under the Yahoo! name. The exception to this is in Japan and Korea where the local businesses continue to use the Overture brand.

Details of current service

Goto.com’s and Overture’s original services provided only a list of search results ordered according to the bid amounts paid by the respective advertisers. Yahoo!’s Search Marketing’s latest iteration, code named Panama, was released early in 2007. It replaced the old formula with one more similar to what Google AdWords uses to rank advertisements against search results. Yahoo! Search Marketing also provides features such as Geo-targeting, Ad Testing, Campaign Budgeting, and Campaign scheduling.