Yahoo’s current problems are of their own making and consequently Yahoo can fix them. While Google has been building a network of advertisers and publishers, Yahoo Publisher Network/YPN has been in an endless beta while turning away publishers and then wondering why advertisers are going to Google’s Adsense. Advertisers are following the publishers to reach their audience. Let’s look at some of the problems,most of which are of Yahoo’s own making:
* Overture/YPN was a great property with a reasonable ad inventory. Ad inventory could have been expanded, but the way to do that is to have a lot of web sites out there running your ads. Google was happy to let smaller web publishers into AdSense. Yahoo was reluctant to let smaller web site publishers into the YPN program. YPN failed to realize that it was better to have an extra million web sites getting a thousand ad impressions each per day than to let AdSense take that additional reach.
* Yahoo had years to expand the YPN ad inventory by signing up niche sites that attracted niche advertisers. What did YPN do? Collected names for when they came out of beta.
* YPN should be treating their beta partners as partners. According to discussions around the web, YPN treated partners as people who were just out to scam them. Heaven forbid if you had a spike in international traffic (e.g. from growing your audience). Yahoo would take that as a sign that you were doing something nefarious. Then instead of doing ad filtering at the ad end, YPN terminated a huge number of publishers for increased non-US traffic.
* For years Yahoo had poor content matching. Improved content matching is not an extremely difficult problem and should take at most months to fix, not years as it has.
* Signing up millions of parked domains while ignoring sites with real content. Ads on parked domains are fine, but they need to be balanced with real content.
* While Google has been signing up websites with its AdSense program, Yahoo with YPN has been collecting names for when they finally come out of beta. Certainly by 2015 Yahoo Publishing Network/YPN will have a huge number of company names and addresses to enter the program. But who will want to then?
None of this is rocket science. Treat partners as partners. Expand your reach and you will expand your inventory. Investors may wonder why Yahoo’s ad revenue is dropping, these are some of the reasons.
YPN needs to do a few fixes:
1. Improve content matching. [Update, October 20, 2008: It looks like YPN is stated that they have been doing so, seehttp://www.ypnblog.com/]
2. Allow publishers into the YPN network.
3. The first two items in this list should help improve the number of ads available.
4. Finally treat publishers are partners.
Yahoo needs to make YPN a success if it wishes to survive. A successful YPN would also be a positive for the Internet too. Google and AdSense have both been much better at customer service and technology than Yahoo has with YPN. Competition for AdSense from YPN will only push both to improve.