Blog Post

Yahoo Faces Another Seach Ad Challenger: YouTube

While the search ad pact between Google (NSDQ: GOOG) and Yahoo (NSDQ: YHOO) has been placed on hold until the Department of Justice determines whether to block it or not, YouTube has quietly moved into the number two search ad driver — a spot Yahoo had held since the rise of Google, according to *comScore* figures. AdAge shows how Google hopes that its latest strategy to prompt YouTube into an important revenue driver involves taking a page from its own successful formula. The move comes on the heels of YouTube’s other recent ad plans, including adding affiliate sales links to its videos.

With YouTube’s search traffic rising — *comScore* said it had 2.6 billion searches, ahead of Yahoo’s 2.4 billion, though still far behind its parent Google with 7.6 billion — the online video site is running its own paid search ads on the right side of YouTube’s search-results pages. The paid ads are headed as “promoted videos.” The ads have a thumbnail image and a title and brief text, similar to Google’s AdWords, which ties keyword-targeted ads against search results. YouTube’s search ads, which are sold on a cost-per-click basis, are completely independent of Google’s AdWords. Still, it’s unlikely that users will respond to the video search ads the way they have to Google’s text-based ads, since YouTube is essentially asking for more of web surfers’ time by proffering commercial spots.