CNET también está disponible en español.

Ir a español

Don't show this again

Culture

L'affaire Yahoo is tres banale to Madison Ave.

Advertising executives are watching the fight over the Internet pioneer. But they're still waiting to hear what's in it for them.

Advertising executives on Madison Avenue, who have always liked to watch a good fight, are more bemused by the Yahoo-Microsoft action than concerned by which company wins.

Ad firms have a big influence on the future of Google, Yahoo, MSN, AOL, and News Corp. by deciding on behalf of clients how much of their budgets to spend with each company, if at all. While the players are important, advertisers don't really seem to care which teams are aligned, as long as they can provide the audience, the ad space, and the return on investment for clients.

The dominant response from members of the advertising community interviewed by CNET News.com is that a new marriage wouldn't change anyone's ad budget.

"The way people like us look at it is as interested but detached observers," said Tim Hanlon, executive vice president of Denuo, the media futures practice of advertising agency Publicis Group.

"If you chart it all out and take those five companies, they all have strengths and weaknesses," he said. "Not one of any of those potential partnerships would solve all the problems. There will still be no one-stop shop for advertising online."

Much of the drama revolves around the coveted search marketing business, which Google dominates. Microsoft obviously wants to absorb Yahoo to mount a more formidable challenge to Google in search engine advertising, as well as take a larger share of the search budgets of advertisers. That's a good thing, advertisers say, because a united Yahoo-Microsoft could help make pricing more competitive.

But it remains unclear to companies that advertise with Google whether a Yahoo-Microsoft combination would change their spending. One ad executive at a major agency, who asked to remain anonymous, said a Yahoo-Microsoft alliance wouldn't take away from how much money he spends with Google, nor potentially how little he spends with Yahoo or MSN.

The executive admitted that advertisers like him have likely contributed to the anticompetitive climate that exists today, giving Google the edge in ads and traffic. When asked whether a Yahoo-Microsoft merger might cause his agency to spend more with the combined entity, he said "maybe."

Another advertising industry observer took a more negative attitude when it came to a Yahoo-Microsoft alliance.

"With Yahoo and Microsoft, you're taking two companies who are spending all their time copying each other's ideas--the company that created Yahoo Answers and the company who ripped them off by creating Live Q&A. Why does that change my ad budget?" asked Chris Tacy, chief innovation officer at Method, a branding company in San Francisco.

Apart from search, a Microsoft-Yahoo marriage could make the two more forceful in content and brand advertising, an area of weakness for Google. The search giant is trying to break into brand advertising with video on YouTube and graphical ads on its ad network.

But so far, Microsoft hasn't pitched the advertising community on why a Microsoft-Yahoo deal would be strategically interesting for their advertisers. Grant McDougall, executive vice president at advertising agency Carat--which plans media buys for Ecostar, the Gap and Pfizer, among others--said Microsoft could bring more discipline to Yahoo in terms of improving its marketing-analytics tools, but he has yet to hear the reasoning from Microsoft.

"What will it do for budgets? In the short term, probably nothing," McDougall said. "This is a long-term play, and Yahoo has to think about where it wants to be--does it want to be a search company or a content company?"

What's more intriguing to advertisers are the possibilities of partnerships between Yahoo and News Corp. (and its MySpace.com social network) or Yahoo and AOL. Many advertising executives say it's easier to see deals for long-term creative advertising across Yahoo and MySpace, or across Yahoo and Time Warner's AOL. Combining brand advertising, targeted behavioral ads, and search ads seems appealing to the advertising community.

"A Yahoo-News Corp. deal or a Yahoo-Time Warner deal would allow us to sync our marketing capabilities. That's really exciting," McDougall said.

Similarly, other advertisers said the Microsoft-Yahoo deal might alienate the ad community in more ways than one, if Microsoft start to make a pitch on why it's important. Software companies, for example, might not want to advertise with Yahoo, if it means the money goes to Microsoft.

"If the Yahoo-Microsoft thing happened, there's the phase of people talking about its promise, but the reality is, people hunker down, and there doesn't appear to be a hard-core defined strategy of what it means to our community," said Rob Kabus, executive vice president of strategy at Aegis, a communications holding company.

"In the absence of that," Kabus said, "people get to be "show me the numbers" about their advertising buys rather than open to bigger strategic alliances."