Microsoft-Yahoo collaboration hits a snag; Microsoft adCenter shortcomings cited

Microsoft-Yahoo collaboration hits a snag; Microsoft adCenter shortcomings cited

Summary: During Yahoo's Q1 FY2011 earnings call with analysts, CEO Carol Bartz said that technical issues with Microsoft's adCenter platform were largely to blame for a shortfall in revenue that was expected from the Microsoft-Yahoo search alliance.

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During Yahoo's Q1 FY2011 earnings call with analysts, CEO Carol Bartz said that technical issues with Microsoft's adCenter platform were largely to blame for a shortfall in revenue that was expected from the Microsoft-Yahoo search alliance.

Yahoo has moved its advertisers from its own Panama ad platform to Microsoft's adCenter as part of the deal with Microsoft. Because of the problems, Yahoo is "holding off on transitioning more page search markets this year" while Microsoft fixes adCenter in the U.S.

Bartz said the problems have included everything from "prediction of what an ad campaign for new advertiser's going to be versus one that's been on there," to "budgets-smoothing" and "relevance" concerns.

Bartz said the adCenter problems are resulting in lower-than-expected returns per search (RPS).

From a transcript of Bartz's remarks during the April 19 Yahoo call:

"adCenter isn’t yet producing the RPS we hoped for and are confident as possible. Advertisers are seeing strong ROI (return on investment), but technical limitations in the current adCenter platform mean the click volumes just isn't there yet. We had expected RPS to be neutral by midyear, it's now evident that it will take Microsoft longer to achieve that goal. We expect that to happen by year-end. In the meantime, the RPS guaranty helps protect our revenue and our view of the long-term potential of the marketplace remains unchanged.

"We are working very close with Microsoft on this. They understand the issues and they're hard at work on systems architecture, science models and better features and functions in adCenter. They have an aggressive roadmap to bring those to the marketplace."

The Microhoo deal, if you need a refresher, was cemented between the two companies, following Microsoft's aborted attempt to buy Yahoo in 2009. Terms of the ten-year alliance included:

  • Microsoft licensing Yahoo’s core search technologies
  • Bing becoming the “exclusive algorithmic search and paid search platform for Yahoo sites’
  • Yahoo becoming the worldwide ad sales force for both companies
  • Self-serve and search advertising being built on Microsoft’s adCenter platform

In 2010, Microsoft and Yahoo execs said the transition from Yahoo's Panama ad platform to Microsoft's adCenter was on schedule, and that advertisers would be fully moved to Microsoft's platform before the holiday 2010 period. Bartz said on yesterday's call that the adCenter migration issues weren't able to be detected until the Panama-adCenter integration was in place.

But it looks like the adCenter platform didn't provide some of the capabilities Yahoo advertisers were expecting. The Wall Street Journal explained the problem as limitations in adCenter "limiting the number times users click on search ads on Yahoo's pages."

I asked Microsoft about Bartz's statements yesterday and received the following from a Microsoft spokesperson:

"We are working very closely with Yahoo on bridging the RPS gap, and have an aggressive roadmap of enhancements designed to improve three key areas: monetization, relevance and advertiser-facing tools. We continue to see progress and are encouraged by the positive results we’ve seen in advertiser ROI, query share and click-through metrics. Recent reports by third-parties point to this positive momentum (Efficient Frontiers and Marin). Each search platform has unique capabilities; we are working closely with some advertisers and channels to help them adapt to adCenter’s evolving platform and marketplace. Additionally, in the past six months, we have successfully migrated tens of thousands of advertisers and their campaigns into the combined Yahoo!/Bing marketplace in the U.S., which was a massive combined effort.

"We remain optimistic about the long-term potential of the combined search marketplace and are working collaboratively with Yahoo to identify real-time insights and create optimizations strategies for our customers and partners."

Microsoft officials are not willing to comment about any specific updates or timing of those updates to the adCenter platform beyond what's in the statement above, the spokesperson said when I asked. Microsoft is releasing regular, seemingly quarterly, enhancements to the adCenter platform.

Related reading:

Yahoo's first quarter: Still looking for revenue growth

Yahoo moving farther away from search with more original content

Topics: Collaboration, Banking, Microsoft, Social Enterprise

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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16 comments
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  • RE: Microsoft-Yahoo collaboration hits a snag; Microsoft adCenter shortcomings cited

    What on Earth is "an aggressive roadmap"? One that tries to take a chunk out of you if you navigate wrongly?

    Proper English please - as she is spoke. Not your mindless, vacuous corporate-speak.
    Policeman Fox
    • RE: Microsoft-Yahoo collaboration hits a snag; Microsoft adCenter shortcomings cited

      @Policeman Fox

      "Aggressive timescale" would work, as would "detailed roadmap". "Aggressive roadmap" implies to me that Ms Bartz is probably not aware that a parsec is a measure of distance, not time...
      OffsideInVancouver
    • Roadmap = Plan

      @Policeman Fox

      Take a roadmap to retirement. If you are close to retirement, but don't have a lot of money saved, you would want a very aggressive plan to save and invest that may carry more risk. However if you are young, and are saving for retirement, you would take a more conservative approach, a plan with less risk and consistent growth.
      Snooki_smoosh_smoosh
      • RE: Microsoft-Yahoo collaboration hits a snag; Microsoft adCenter shortcomings cited

        @Snooki_smoosh_smoosh

        I don't agree. A roadmap clearly is not the same thing as a plan, but might reasonably help you formulate one, if you were travelling by road. There's nothing wrong with metaphorical language, but often it seems to be used corporately more to give the impression that an idea is much bigger than it really is - puffery, really. I could have picked almost any sentence from the MS comment, which is dreadfully written, but to focus on the one I initially chose, why is "an aggressive roadmap of enhancements designed to improve three key areas" tellling me more than "we will improve in three ways"? Even 'intend to improve' might be OK, if weaker.

        Corporate documents often have loads of this almost meaningless guff, but despite years of 'bull$$it bingo', it shows no sign of abating.
        Policeman Fox
    • RE: Microsoft-Yahoo collaboration hits a snag; Microsoft adCenter shortcomings cited

      Are we afraid to state the obvious? "Aggressive Roadmap" is corporate-speak BS.
      davey23
    • Agressive roadmap

      @Policeman Fox
      a route that takes you over rougher terrain (roads) and saves time, opposed to a standard roadmap which takes you the slower, predictable way.
      Will Farrell
      • Congratulations!

        @Will Farrell
        You not only managed to post a comments sans troll-like remarks, but even almost made it humorous!

        Now if you would just quit making the troll/shill posts altogether, the world would be a far lovelier place.
        rahbm
  • RE: Microsoft-Yahoo collaboration hits a snag; Microsoft adCenter shortcomings cited

    Since incremental cost of adding Color in online 'printing' is nil, I'd suggest using different palate selections within text to discriminate between literal use of English language - as opposed to figurative, hypothetical, science fictional and purely techno-babble/econo-jargon.
    jerswing@...
  • RE: Microsoft-Yahoo collaboration hits a snag; Microsoft adCenter shortcomings cited

    Rarely do MicroSoft's 'roadmaps' correspond to reality.
    john_gillespie@...
  • RE: Microsoft-Yahoo collaboration hits a snag; Microsoft adCenter shortcomings cited

    During the 70s when I lived in Chicago I had concluded that despite their own spellings and pronunciations Americans generally used correct English in the written form. With such huge proliferation of the Internet blogging I have to abandon that notion.<br><br>One of the biggest use of wrong terminology has been using "momentarily" when the correct usage should have been "in a moment" in the situation. The first one refers to time duration while the latter refers to time delay. <br><br>Corporate techno-babble BS compounds the situation. They however achieve their goal. The listeners are not supposed to make head or tail out of what is "being said" - correction "being uttered" !
    pmshah@...
    • sloppy writing = sloppy thinking

      @pmshah@... I think it was Plato who said "Wise men speak only when they have something to say. Fools speak because they have to say something."
      otaddy
    • US English is riddled with such inconsistencies

      @pmshah@... <br>I was mildly amused to hear the pilot on a US flight advise that "we will be landing momentarily". Maybe I am fussy, but I prefer it when they stay on the ground long enough for me get off the flight, rather than bouncing off on the next sector a moment later.<br><br>...and don't get me started on the misuse of "alternate" instead of "alternative". AARRGGHH!!!!

      On the other hand, credit should be paid where it is due; at least US people often correctly use the subjunctive mood, and I wish British and Australian people would copy this.
      rahbm
  • MS is working hard. On 100% recycled paper.

    Joke Alert. MS doesn't know how to make adCenter better. Take that.
    everydaypanos
  • new microsoft's manipulators

    other microsoft manipulation because know that all the world hate microsoft and so many people will like yahoo
    petux7
  • Envision?

    It's curious to me that most of the comments here have nothing to do with the subject of the original post but concern themselves with the better use of English. How refreshing.<br>I've never seen or used an "aggressive roadmap" but my TomTom does get miffed if I take a "wrong" turn.<br><br>As for the original problem, I think what Microsoft needs to do is to "get its corporate arse in gear, fix this ball of wax or risk falling off its perch."<br><br>You all have a nice day.
    grax
  • RE: Microsoft-Yahoo collaboration hits a snag; Microsoft adCenter shortcomings cited

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