Yahoo Japan role in Microsoft search deal 'still unclear'

Microsoft and Yahoo yesterday announced a 10-year revenue-share search pact that will create what they hope will be a more credible search competitor to Google.

However, market leader Yahoo Japan is majority-controlled by Softbank with 42 per cent ownership of the company. Robbie Hills, Asia-Pacific CEO of GroupM Search, said Yahoo Japan is the “big unanswered question” that wasn’t broached during the companies’ global conference announcing the deal. Yet Yahoo Japan is among the most profitable and successful of its franchises in the world. It recently posted a 0.4 per cent rise in Q1 profit on the back of rising online advertising targeting women.

Hills adds that another cause of confusion for the two companies comes as Yahoo reveals that it will end the use of its ad sales platform Panama, which was introduced to Southeast Asian markets only last year, in favour of Microsoft’s adCenter.

“Any advertiser currently on the Panama platform will need to be transferred to adCenter, which really affects advertisers in Hong Kong, Taiwan and Japan where Yahoo is very popular and adCenter isn’t as much a focus,” he said. “In terms of knowledge in the region, adCenter doesn’t really exist outside Singapore, and even Yahoo’s search teams themselves are only trained on how to use Yahoo’s search marketing sales platform.”

But Leonard Tan, managing director of PurpleClick in Singapore, notes that results from the deal won’t be evident in the region for a significant amount of time because it could take as long as three years to get full approval from governments and fully implement changes into each market where Microsoft and Yahoo operate.

Tan adds that he’s sceptical that the deal will create any shift in the region’s search landscape, at least in the short term. “I think it’s all about the user experience. The competition, in this case Google, will only be seriously affected if they can figure out how to increase the share market share, or user experience when searching.”