Yahoo delays new advertising system, still losing out to Google

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It seems that Google do nearly everything bigger and better than everyone else at the moment – or at least, they know how to make money from it.

Love it or hate it, most large sites need advertising revenue to sustain them; Yahoo lost 13% on its share value last night after it had to delay the introduction of a new advertising system that is supposed to accurately match advertising to users’ queries.

Quality testing with a small cross-section of Yahoo’s current advertisers has shown that more work needs to be done.

It’s vital to Yahoo that this gets sorted out, because the majority of its revenue comes from advertising on its search results service. They claim that over 400 million worldwide internet users visit its site or use its services each month, and though its search engine has been winning market share recently, revenues have fallen.

In the meantime, Google have introduced ‘click to play’ video advertising, which is quite a smart move given the popularity of services such as Google Video and YouTube – though could backfire if they become too intrusive, or don’t convert well for the advertisers.

Google is definitely the golden boy at present. Will Yahoo ever catch up or innovate in some way that sets it apart and popularises it again?

What do you think? What should Yahoo do? Is Google all-powerful? Should we be supporting small. home-grown search engines instead?

Andy Merrett