Top Stories October 2008

Google U-turns on gambling policy
by Hannah Kimuyu

We have to confess we weren't all that surprised to hear today's leaked news that Google plans to reverse its gambling policy tomorrow (Friday 17 October, when the announcement will be officially made).

In a complete about-turn, the search engine giant will now allow gambling adverts that target England, Scotland and Wales. A company spokesperson today said: 'Google AdWords will allow online gambling advertisements targeted to Great Britain as long as the advertiser is registered with the Gambling Commission and provides a valid operating licence number.'

With the former ban made as recently as June 2007, today's scoop begs the question: why now?

While a Google company statement claims the policy reversal was caused by 'several factors, including business, legal and cultural considerations', we would suggest otherwise. We believe the policy reversal is partly a reaction to the credit crisis and advertisers' reduced budgets. Even the mighty Google is feeling the crunch; in fact, Google's share price dropped to its lowest in a long time ($339 today, 6.5% lower than the day before). We also see it as an ill-disguised attempt to increase Google's market share even further - that, and a response to encouragement from major industry players.

The implications are many. Advertisers with a valid licence will be able to start advertising almost immediately and so increase their own UK market shares. But affiliates and major brands - who found ways of getting gambling ads out during the ban - will ultimately face increased costs-per-click and acquisition costs. This is not so much a problem for the major brands, but it will certainly make competing in the marketplace more difficult for the affiliates.

Microsoft in bids to boost search engine users
Microsoft is making some firm attempts to win over search engine users from Google. Facebook users can now search the web using Microsoft's search engine without even leaving the social network.
But sceptics wonder how much of a boost Microsoft will achieve from their residence in Facebook. It will likely increase brand awareness, but will it drive search traffic and revenue, considering all the searches will take place within the social network anyway?
In a further bid to increase traffic, Microsoft is launching an air-mile style promotion, named Search Perks, in the US. The scheme will allow all US internet users to earn a 'ticket' every time they conduct a search on its Live Search site. These can then be redeemed against 'prizes' such as free music downloads and air miles.
In other Microsoft news, the organisation is set to develop three online search technology centres in London, Paris and Munich. Part of Microsoft's continued investment in research and development, the centres will support projects such as a $500m European data centre.

YahOL or AHoo scenario could become reality this month
As Yahoo continues its drawn-out merger discussions with AOL, there is talk of a deal happening as early as this month.
The discussions surround Yahoo's acquisition of AOL's content, services and advertising, but not their ISP services. Time Warner would also offer a couple of billion dollars in cash and have a one-third stake in the new entity.
The proposed deal has its pros and its cons. The companies in question believe Yahoo's advertising platform would monetise AOL assets to just over $2.4 billion annually, far more than AOL generates today. On the downside, the combination of Yahoo/AOL would have 48% of all email accounts worldwide, and 39% of the global market share for instant messaging.  But this would only be a problem if Microsoft (who has 42% of all international email accounts and 55% of the global market share for instant messaging) bought the combined entity.
What isn't clear is whether AOL's assets will fix any of Yahoo's problems. TechCrunch maintains AOL-Yahoo can't succeed in the long run without strong and competitive search advertising. In an article dated 6 October they said: 'It may take the (US) Department of Justice to get that message through to Yahoo's executive team.'

Google/Yahoo ad deal put on hold
The Google/Yahoo search advertising tie up, announced in June this year, has been further delayed to allow for the continued investigation by the US Department of Justice.
The deal, which would involve Google supplying Yahoo with advertising in some of its search results pages in the US, aims to increase Yahoo profits and follows Microsoft's attempted takeover bid of the search engine earlier this year.
Since the announcement of the Google / Yahoo partnership in June, the deal has come under scrutiny from a range of different quarters. As well as receiving criticism from competitor Microsoft, the Association of National Advertisers and the World Association of Newspapers have also opposed the deal.
In an attempt to promote the deal, both Google and Yahoo have launched sites explaining their position on the partnership. Comment can be found on the Google Public Policy Blog. It is reported that the delay is only 'brief' so further developments are expected to follow soon.

Ask pushes search in new direction
Ask.com will launch the new, overhauled version of its search engine in the UK on 20 October 2008, as part of its bid to provide the most relevant search results on the internet. 
The new look site will respond to users' questions directly on the results page and - so the company claims - improve speed by 30%. In fact, early tests indicate an immediate enhancement of 16%.
Cesar Mascaraque, European MD at Ask.com, says: '(Our) goal is to reduce the average number of clicks it takes customers to find what they are searching for online. We want to get from three clicks to one click of the search box.'
Mascaraque denies the changes have been on the back of the previous failings of the spring 2007 relaunch. He says: '(Our users) wanted faster, more relevant answers in an enjoyable and simple user interface. We listened and now we've delivered the best possible search experience on the web.' 

Online ad spend on the up as total ad market wanes
Despite the economic downturn, internet ad spend grew 21% year on year in the first half of 2008, totalling £1.7bn, according to the Internet Advertising Bureau (IAB).
Online ad spend now claims 18.7% of the market, which sees it playing catch up with the major players. It is now only 0.6% behind press display's 19.3% market share and 3% behind TV's 21.7%.
While marketers demonstrate ever-growing confidence in online marketing, the same cannot be said of press, outdoor and radio, which have all experienced falls in expenditure. The IAB reported that the total ad market fell by 0.7% year on year to $9bn.
More specifically, paid search continues to lead the way, growing by 28% year on year. The industry was worth £981m in the first half of 2008, with its market share up to 58.3% of total online advertising. Search has become a staple on the media schedule and is increasingly integrated into traditional and online advertising campaigns.

Google TV ads to drive UK search revenues
Google plans to put branded search calls-to-action in TV ads in a bid to drive search volume and revenues in the UK. It will be the search engine giant's first entry into offline advertising this side of the Atlantic - and will be conducted on a trial basis.
Google's aim is to measure the uplift in search volume driven by TV ads - and test the effectiveness of search prompts within the ad creative. TV viewers will be directed to Google to search for specific brand-related keywords.
The search engine will be the latest in a line of brands in the UK who have encouraged people to search for brand-related keywords. Orange's current branding campaign suggests people search for 'I am' online, while the Department for Environment, Food and Rural Affairs recently ran ads prompting users to search for 'Act on CO2'.
Google is currently approaching UK agencies to participate in the tryout.