Online Advertising -Yahoo vs Google

Yahoo will be remembered as one of the first Internet success stories which pioneered the search engine and online advertising , however in the recent past it has been totally eclipsed by its younger and formidable rival -Google . To an average Internet user like me , Google is now part and parcel of my life , ....when Google introduced Gmail with features which was not available with Yahoo, I shut down my Yahoo account , and after buying off orkut and blogger , Google actually locked me in as a user . The relationship with Google became stronger with Google AdSense , Google Analytics (I track the page views on my blog through analytics ) , Picasa , Google Earth and Google Desktop . As a former Yahoo user (and I have been one for many years) , these integrated services made my shift to Google seamless (I use my Gmail Id to log into orkut, G-analytics , G-AdSense, Picasa etc...). As a reader ,you would now be wondering that this post is a small lecturette on Google strategy and how it overtook Yahoo .......that is not the intention.....I would like to draw the attention of the reader on the new twist to the Yahoo vs Google battle based on Viacom advert deal , concluded yesterday .

In financial terms Google has left Yahoo far behind by becoming the Internet's largest advertising network, Google last year earned $10.6 billion (Net Profit $3.1 bn), compared with Yahoo's $ 6.4 billion (Net Profit $ 751 million) the profitability of Google is at 29% and the same for Yahoo is 12% .... Google's market value is $145 billion, compared with Yahoo's $43 billion...... The gap seemed to be too large to be bridged ...... as you logged into Orkut.com , you would notice these small text adverts on the right of your screen , similarly for Gmail .The Google dominance over Yahoo on the Internet advert business seemed complete till yesterday when the Viacom deal was announced .Viacom said yesterday that it picked Yahoo as its online advertising partner in a multi-year deal that could help Yahoo become a more formidable challenger to Google . Viacom with its suite of websites (MTV.com, VH1.com, Nickeldeon.com ...) will provide a platform for the text adverts which Google dispalys through Gmail or an Orkut .

The deal seems formidable on paper and promises to help Yahoo to increase it's pie in the online advertising business , howver an the key question that comes to my mind is -

"How will it lock a user" to click on the advert only from Viacom's websites ?

In the case of Google , it provides an complete suite of services which are based on a single login , and therefore a typical user is locked into the world of Google . These dedicated users click on the small text adverts and with Google's alliances with MySpace and AOL makes it an interesting eco-system to combat ...and this raises the follow up question , which is :

Does the Viacom-Yahoo deal make the twosome an advertising ecosystem which has the scale and muscle to take on Google ?

I don't have the answers but hopefully somebody in Yahoo Inc does , it would be interesting to follow the Yahoo vs Google battle and the dynamics of the Internet advertising industry .