What a week in the search engine marketing (SEM) industry. It all seems to be kicking off with all three of the search engine heavyweights slugging it out for supremacy. Yahoo seems to be the most animated at the moment in the wake of Microsoft’s take over bid for them. The threat of acquisition has ignited Yahoo into action. It appears they have now resorted back to their old ways. Back in the day when Yahoo was Overture they used to use partnerships as a means of gaining market share. Yahoo seems to be going down that road again.

It has been reported in the New York Times that Yahoo have been in talks with AOL, a unit of Time Warner, to form a partnership that would combine both the companies Internet operations. If this was to occur than AOL-Yhaoo would be valued at around $10 billion. Yahoo would also receive a large proportion of cash from Time Warner in exchange for 20% of the Yahoo and AOL partnership. With these additional funds it would allow Yahoo the ability to buy back several billion dollars worth of Yahoo stock and protect them from the growing hostel threat from Microsoft.

Yahoo has also made another show of strength in the field of search engine marketing (SEM). In the area of analytics Google owns Google Analytics and Microsoft have their adCenter Analytics service which is still in its beta stage. So not to feel left out it appears Yahoo is getting in on the analytics action as well. Yahoo has just brought Tensa Kit, which owns the IndexTools web analytics service. However IndexTools is a fee-based product so i’m guessing that in time Yahoo will make this analytics service free because both the analytics services from Google and Microsoft come at no charge. This is a strange move on Yahoo’s part because they already own a set of analytics tools which are offered by Keylime Software. So we will see what free analytics package Yahoo decides to other. That is if they decide to offer a free analytics package at all?

But the biggest shocker this week has been Yahoo’s announcement that they have struck a deal with Google that would mean that these two search engine heavyweights will be sharing advertising space. Both company’s have agreed to run a two-week pilot which will see Google’s paid search adverts run alongside Yahoo’s on Yahoo’s search engine. The pilot will only apply to www.yahoo.com and will be limited to no more than 3% of Yahoo! search queries in the US.

So does this mean Yahoo has a longer term plan to join with Google AdSense for Search program? But let’s look at this relationship realistically, between them Google and Yahoo control around 80% of the US search engine market. With this in mind, a formal partnership between Yahoo and Google would surely be deemed anti-competitive and be blocked by US regulations over competition.

So if this Yahoo-Google alliance cannot work out to be long-term relationship than why is Yahoo taking part in this trial. Is this move a desperate attempt to generate more revenue for Yahoo to help battle off Microsoft? Or are they trying to show Microsoft that Yahoo is still a major player in the field of search engine marketing and has other options available to it.

As an observer I must admit that every play Yahoo is currently making in the search engine marketing arena seems to be very timely in light of Microsoft’s takeover bid. But again maybe I am wrong, maybe Yahoo is simply showing the search engine marketing industry that they are still a player - and a major one at that - and can thrive on their own.

Either way it is obvious that Yahoo have now suddenly stepped up their game in search engine marketing and are exploring all strategic alternatives to help maximise their stockholder value which includes the exploration of potential industry partnerships. But a partnership with Google? This isn’t really going to work long term….is it?

Forget Star Wars, Search Engine Marketing (SEM) is feeling the force of the “Ad Wars”. As I mentioned in my last blog post Google recently brought DoubleClick Inc, an Internet advertising solutions company, so that they would have a better vehicle for selling display ads. In response to this Microsoft strengthened its armory in search advertising by purchasing aQuantive, the parent company to Avenue A, Razorfish, Atlas and DRIVEpm, for $6 billion.

Now Yahoo has exposed their hand and unveiled their new move in the search advertising industry. Yahoo’s “Apex” project called AMP! is a new advertising management platform to rival Google and Microsoft in search advertising. Yahoo state that AMP! has been designed to streamline and automate online advertising across a variety of target markets, publishers and ad type. The advertising management platform will feature an open API and will include Yahoo! owned-and-operated inventory and more than 600 US newspapers in their Newspaper Consortium.

In a statement Hilary Schneider, Yahoo! EVP of Global Partner Solutions, announced that “While online advertising grows more sophisticated, the process of doing business today is surprisingly cumbersome and manual,” He believes that the AMP! Platform will help remedy this because it can deliver a faster, easier, and more automated and integrated way to create, buy, and sell advertising.

This new advertising platform is still several months away from being released for the general public to use, but Yahoo aims to go live with this new advertising platform by the third quarter of this year. Now Yahoo has invested significantly in the AMP! platform technology so it will be interesting to see if they can deliver on their promise to overcome the inefficiencies that they currently say are constraining the online advertising industry. Let’s see if they really have produced an advertising platform that, in their own words, is “faster, easier, and more automated”.

I personally think the exposure of their new advertising management platform is a strategic and well timed move to help put pressure on Microsoft to up their bid for Yahoo. This is because this new announced about their advertising management platform comes in the wake of Microsoft’s ultimatum that they have a deadline of three weeks to decide whether to accept their $41 billion takeover bid. Microsoft has warned Yahoo that if a deal hasn’t been reached by April 26 2008 then they would launch a hostile takeover at a lower price.

In an official letter to Steve Ballmer, Chief Executive Officer of Microsoft Corporation, the board of directors at Yahoo wrote; “Our Board has reviewed your most recent letter with regard to the unsolicited proposal you made to acquire Yahoo! on January 31, 2008. Our Board carefully considered your unsolicited proposal, unanimously concluded that it was not in the best interests of Yahoo! and our stockholders, and rejected it publicly on February 11, 2008. Our Board cited Yahoo!’s global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as its substantial unconsolidated investments, as factors in its decision.”

However the letter does than go on to say “At the same time, we have continued to make clear that we are not opposed to a transaction with Microsoft if it is in the best interests of our stockholders. Our position is simply that any transaction must be at a value that fully reflects the value of Yahoo!, including any strategic benefits to Microsoft, and on terms that provide certainty to our stockholders.” So it is clear that Yahoo is not opposed to the takeover bid! Their letter clearly expresses that Microsoft have simply not offered what they feel reflects the true value of their company. In the letter they seem to have also made sure that Microsoft are aware of their new investments into advertising platforms in fact they deemed it a “significant” investment.

Can you now see why I’m suspicious of this sudden and timely launch of this new advertising platform? To me it just seems as if Yahoo are now just simply getting out the best china and cutlery and generally pulling out all the stops to hopefully get a better bid price out of Microsoft. However I could be wrong, Yahoo could simply be trying to boost the public’s confidence in their Search Engine to show that they are still a heavy weight contender in the Search Engine and Search Advertising industries and have nothing to fear from the likes of Microsoft.

Well either way we do not have long to wait! It will be interesting to see what move Microsoft now makes if Yahoo do not meet their three week deadline. Will they be impressed enough by Yahoo’s best efforts and dig deeper into their pockets? Or will they tighten the purse strings and become hostile towards them. What will be the next episode in the Ad Wars? I wait with bated breath!

When Google brought DoubleClick, the online advertising company, last month for $3.1 billion it was a tactical move on their part which gave them a voluminous control over the $40.9 billion online ad market, which hasn’t gone down too well with their competitors like Yahoo and Microsoft. This was an usual move for Google as this takeover was the largest move the company had made in its nine-year history.

Their has been no effect so far of this acquisition but I do fear it could in the future raise the cost of ad serving for rival intermediaries. I say there has been no effect, but this is not entirely true because last month, Eric Schmidt, the Chairman and CEO of Google announced that their could be a possibility that some jobs may be lost. And true to his word there has been! I read in the New York Times the other day that Google will be reducing the headcount of the American division of DoubleClick by about 25% leaving around 300 employees without jobs or placed into what Google has termed “transitional” roles.

As a search engine optimisation (SEO) company we can see some so very basic conflict of interests going on with this acquisition of DoubleClick. Bundled in with the DoubleClick package came a company called Performics. Now this is where we can see a problem, because Performics, like us here at White Hat Media, provided search engine marketing (SEM) and search engine optimisation (SEO) services. As you will already know search engine optimisation (SEO) is a way of raising a websites rankings in search engines like Google for specific keywords.

As Google’s core business is its search engine it seems that Performics - with Google backing - would have inherited an unfair advantage over search engine optimisation (SEO) companies like us. Here at White Hat Media and at most other search engine optimisation agencies, we are in a constant battle with the Google algorithms to help get our clients websites a higher ranking, on their selected keywords, in the Google search engine.

But now we would have to also compete against Google’s own a search engine optimisation (SEO) agency. The reality is how can any SEO company compete against Google as a rival in a race to get a company to the top of GOOGLE? You cant! We might as well pack up our offices now.

But wait……put that photo of your kids back on your desk and switch you monitor back on…….I haven’t finished yet! I have some good news! Google understands this complete conflict of interest and has now decided to split Performics into two separately run business units, which will be Affiliate Marketing and Search Marketing. They have also officially announced they plan to sell off the Search Marketing element…phew I can slept better at night again now! To date Google has already received preliminary interest in their newly established Search Marketing business unit but no sale as of yet. Fingers crossed they sell it soon, in fact I think we here at White Hat Media should buy it – can anyone lend me a few million pounds.

This is a good move for Google because not only does it keep us search engine optimisation (SEO) companies in business but it reinforces Google’s objectivity as a trusted search engine.

I have been observing Google’s Search Engine optimisation (SEO) Guru Matt Cutts’ blog recently and I noticed this little gem which made me smile. In a post on the 3rd March Matt Cutts gave his views on what he predicts will happen in 2008.

“2008 will be the year that hacking and Search Engine optimisation (SEO) collide in a major way. By the end of the year, a nontrivial fraction of blackhat SEO will involve illegally hacking sites for links or landing pages. One webhost will get a significant black eye as hundreds or thousands of customers’ websites are hacked. The growth of illegal-blackhat SEO will leave traditional blackhats with a difficult choice: risk doing something illegal or sit out.”

This prediction post is scarily true because as link building becomes more important – and therefore more competitive – as a means of Search Engine optimisation the more under handed SEO techniques are going to be employed to out perform competitors online. There are only so many links you can build ethically before you get to certain link building pinnacle. It’s at that point companies will have to start looking at other means of link building to gain the edge.

Matt Cutts’ prediction regarding Search Engine optimisation (SEO) in the future made me smile because it occurred on the very day that “The Earth Liberation Front” (ELF) website was hacked by a Viagra company. The malicious blackhat SEO technique carried out by this Viagra company involved changing the meta title tags on the ELF website to promote their Viagra products. The navigational links on the website where also changed to point to specific Viagra promotions.

I am suspicious of this whole situation because the actual domain for the ELF website appears to be currently up for sale. This then could potentially mean the website is no longer being maintained or monitored. One theory I have is that the Viagra based company could have brought the domain name and website content after the website was abandoned and used it as a means of link building for their products. Or this could just be a straight forward website hack.

Either way, I have to wonder whether Matt Cutts’ was aware of this website hack and knowing the potential growing threat of blackhat SEO techniques, used this idea for his predication post or whether he really is THAT good a Search Engine optimisation (SEO) Guru that he simply knows what will happen in the future……spooky thought hey!