Yahoo launches ad service, gets ready to take on Google
By Lawrence Casiraya
INQUIRER.net
First Posted 18:29:00 05/22/2008
Filed Under: Technology (general), Internet, Advertising
MANILA, Philippines -- Yahoo introduced its keyword-based advertising service, putting the company in a race with Internet search rival Google in going after local online advertisers.
Yahoo's system, also referred to as Project Panama, allows businesses to bid online for keywords users enter into the company's search engine. A travel agency, for example, can bid for keywords "Boracay resort" in order to put itself on top of search results.
Yahoo earns through the "pay-per-click" model, meaning advertisers only pay when the user clicks on links leading to their websites.
Yahoo is launching the service on a per-country basis in the region, playing up to its strategy of going after emerging markets like Southeast Asia. The company is aiming for small and medium businesses who may want to channel resources instead on a non-traditional advertising medium such as the Internet.
In the Philippines, though, Yahoo could be challenged by lack of Web familiarity among businesses, a fact acknowledged by Jojo Anonuevo, who heads the company's local operations.
"It depends on how fast local companies begin adopting Web advertising. A lot these companies still need to get online," Anonuevo said when asked about the potential market for Yahoo locally.
With majority of businesses categorized as SMBs -- more than 780,000 to be exact, according to Yahoo -- the company is optimistic about Web advertising's potential in the Philippines. Yahoo said it has 53 million users in Southeast Asia alone.
Anonuevo believes there are enough Web-savvy companies out there. "And there are companies that may not yet know about our service," he said.
And then there are companies that may already be using a similar service from Google. Yahoo has had its share of criticism for being late in the game - Project Panama was first launched in 2006 -- and creating a service that mirrors Google's AdWords.
"The challenge for Yahoo is positioning because they obviously don't have first-to-market advantage," said Donald Lim, chief executive of Yehey.com, which "resells" ad services locally for both Yahoo and Google.
Lim, however, believes the local market still offers a lot of opportunities for both companies.
"The Philippines may be a good battleground since online advertising is just gaining ground," Lim told INQUIRER.net via phone.
In an interview during the Yahoo briefing, Anonuevo hinted the company will strengthen its sales presence in the country. On the other hand, Google has appointed a lone executive managing its sales activities in the country.
Locally, Yahoo has said it intends to become a "must-buy" for advertisers after creating localized versions of its services, including search and email, also available on mobile phones.
"Yahoo is not even positioning its service as an alternative (to Google). I believe it wants to take on Google head-on," said Lim, who is also president of the Internet and Mobile Marketing Association of the Philippines (IMMAP).
Keyword search, though, may have less potential since not too many local businesses have websites to begin with. Unlike Google, which sells only keyword search, Yahoo also sells banner ad displays across its different services.
"A challenge for Yahoo is to offer something of value to advertisers that they won't get from Google's service," Lim said.
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