Sootle Weblog

With the battle raging on in the internet advertising arena, Yahoo! has won out to be the main advertising source for Bebo, a popular social networking website for folks in England.

Officials are expected to announce the agreement in London today and is part of a plan to boost their advertising revenue.

Social networking websites like Bebo, Myspace and Youtube have thrown a wrench into the portals by attracting more direct advertisers to their own website and skipping the main portals.

“This exclusive partnership is the next step of our ongoing strategy to build the largest and most effective online advertising network,” said Toby Coppel, managing director of Yahoo Europe.

As part of its expansion efforts, Yahoo has bought online ad exchange Right Media Inc. for nearly $700 million and plans to take over direct marketing network BlueLithium for $300 million.

This will be Yahoo’s first partnership with a social networking site and terms of the revenue share weren’t disclosed. Yahoo will start displaying ads to Bebo visitors in the fourth quarter.

AP

Yahoo hasn’t give up the dream of winning the search engine wars, despite the big lead Google has taken. According to recent Nielsen reports, Google has accomplished two remarkable things in the search business recently:

• They handled 49% of all internet search traffic in March
• They were up 32% over the prior year

This would seem to indicate that end users are plenty happy with Google search, despite what many webmasters might think. Yahoo has to focus on a few key issues to battle Google. Yahoo and MSN are gaining some amount of traction:

Yahoo handled 23 percent of searches in May, answering 34 percent more queries than it did last year. Microsoft’s MSN Search was third, handling 11 percent of Internet searches in May. MSN gained the most ground, however, increasing the number of queries it processed by 42 percent.

I’m not sure how the all scored a gain. I guess it’s possible that there were more people searching in general during the time period, although that doesn’t seem like a reasonable conclusion. In any event, strong gains for all three search engines is definitely good news for people in the search engine marketing business.

The next six months will tell if there really is a search engine war at all. Most people appear to be content to see Google in the leadership position. Everyone that is, except Yahoo and MSN. Both companies have enough resources to do something about it.