Is it profitable to display competitor ads?

[jawn_tech]

Let's take a look at an aquisition that took place not long ago -- but an eternity in tech years -- the Yahoo aquisition of Flickr.

However, what still mystifies many are Google's Adsense ads still being displayed on Flickr. While some speculate that Flickr will end up being a testing ground for displaying their own ads, Yahoo Publisher Network (aka, Overture), the cold truth of the matter is that after the time that has passed since the aquisition -- Google ads are still there winking us in the face.

I don't know about you, but I have three guesses as to the hold-up of making the switch.

First, maybe they just haven't gotten around to it yet, and things move slowly internally there at the Y.

Second, maybe they're finding the Google Ads to be a better way for the aquisition to pay for itself -- which may say something about YPN...or not.

My last guess is that just maybe they're not as interested in Flickr, in itself, as a moneymaker. Rather, it could be a testing grounds to study their competitor's revenue-generating ads in a unique website environment, in order to tweak their own YPN.

My gut feeling leans towards the last one. Flickr may be the first to do what it does, as it introduced the concept of "unsupervised" tagging of certain areas of pictures (I'm not going to touch that one...), and trust me I've found it to be as fun (and humorous) as the next person. But I can't say I think that Yahoo would have purchased it for its technology or branding, as a stroll through HotScripts (for instance) will show that with up-and-coming ready-made scripts that do nearly the same thing, there could be an emerging crop of similar sites in no time. So to me, it clearly seems this would be a "strike while the iron's hot" scenario.

That is, unless having Google Adsense is already hot enough for Yahoo.

[etechsupport]

I think this is a common drawback of Google adsense is that it making the implementation of bidding strategies much more difficult. The Interface does not indicate what your competitors are bidding, it only indicate the maximum bid for any particular keyword.

[incrediblehelp]

Competing ads or not the bottomline is making money and I am sure that is what they care about.

[khurramali]

Flickr has potential to grow into a great service.

And become a source of revenue for Yahoo Also.

It is just not on the immediate to-do list of Yahoo.

They have bigger fish to fry. (Google)

They need Bait to lure big fish (Google)

They can use Flickr as a bait.

[krooga]

Originally Posted by etechsupport

I think this is a common drawback of Google adsense is that it making the implementation of bidding strategies much more difficult. The Interface does not indicate what your competitors are bidding, it only indicate the maximum bid for any particular keyword.

Well said nevertheless the top bid price that comes up on Google is the top bid price for the whole of Adwords and not Adsense in particular. In other terms, some advertisers decide not too bid on the "Content Network" and thus it is impossible to determine whether the top bid price is related to adsense or to the SE paid results. On top of that it is unclear how much commission Google Adsense keep on the bid price thus making it very difficult to determine the total outcome...

[etechsupport]

Well, on second look Google actually doing very little in ad rotation, suppose if a certain ad is highly targeted to the content of your site, it might be shown several time. Secondly when you attract a large number of return visitors, or generating a high number of page views per visitor, you may experience decline in click through rates on the ads over time.
If you analyze it well it shows that Google targets the ads based on your site’s content, not your visitor’s desires.

[nuttymarketer]

Thanks Jawn,

for sharing your Ideas and details on flickr.com It was really fun. Lets see what Yahoo do with this. But the fate of New innovative babies are in hand of big guys.

I always fear Dooms day. Just remember Netscape. Big guys do this just to study and kill the competition Hope, Yahoo do not repeat it.

Arvind Kumar
He who hesitates is a damned fool. --------- Mae West