Google loses to Yahoo

From The Courier Mail

GOOGLE'S efforts in the Australian market have taken a body blow as News Interactive yesterday became the third major online publisher to sign a search marketing distribution agreement with Yahoo's subsidiary Overture.

The News Corporation Ltd's online arm joined Fairfax's F2 and CNN in ditching Google in favour of Overture, which has also signed No1 website publisher Ninemsn in the four months since it opened a local office. Both News Interactive - which publishes AustralianIT - and F2 had been Google customers for just over a year.

The losses for Google's local operations come as the company prepares for its highly anticipated $US2.7 billion ($3.9 billion) float.

The News deal was Overture's most comprehensive to date, as Overture would also provide search functionality within NI websites and contextual advertisements alongside content services, which NI managing director Nic Jones said Google had been unable to offer in Australia. But there was general dissatisfaction with Google's service.

"The reality is they haven't committed that much resources and time to Australia because they've worried more about other areas," he said. "We've had six different account managers within Google in a very short space of time, and getting them to concentrate has been pretty tough.

"I would suspect others have had similar experiences."

The agreement was initially for three years and Mr Jones, who was formerly the managing director of Yahoo Australia, said other Overture partnerships were being discussed. Google declined to comment.

Search marketing, which allows publishers to display relevant text-based advertisements next to search results with particular keywords, has grown quickly and is expected to be worth more than $US2 million this year, providing a badly needed second wind for the online advertising market after the dotcom crash.

Overture pioneered the concept before it was bought by Yahoo in July, but Google and other companies, such as Australian-founded LookSmart, have also offered search marketing services.

Overture's Australian managing director, Mel Bohse, said that, unlike Google, her company did not have its own high-profile web presence, which meant there was less risk to publishers of their readers being diverted to another search destination. Ms Bohse said that the agreement took Overture's distribution reach to 85 per cent of Australia's online population.

Search marketing allows advertisers to bid against competitors by paying more to receive a more prominent placement in the case of popular keywords.

Ms Bohse said that, unlike its competitors, Overture employed editorial staff to ensure the keyword placements were being bought by companies with a legitimate link to the word.

She pointed to the Jetstar launch, when Flight Centre bought advertising links on Google so that web users searching for "Jetstar" were served up sponsored links to the travel agency.

"That would never happen on Overture. It's not a good experience for consumers to be taken somewhere they don't want to go," Ms Bohse said.

"And it's not good for advertisers, they're looking for qualified leads."