Yahoo - Comcast = The Deal of the Year
Little has been written about yesterdays announcement that Yahoo would be selling display and video ads for Comcast's websites, in particular, Comcast.net. — What's so special about this deal beyond the shear size of Comcast and the inventory …
Context & Ripple Effects
Comcast spent March openly shopping its ad business: PaidContent reported the cable operator was unhappy with Google over its search arrangement and talking to MSN and other partners about its inventory. Six weeks later the answer is Yahoo, which takes over display and video ad sales for Comcast's web properties, including the portal inventory Comcast had been dangling since its spat with Google.
For Yahoo the timing matters. Terry Semel and Susan Decker had just fielded questions on the Q1 2007 earnings call, and the company has been stacking up moves beyond its own pages — mobile publisher ad tools announced in late March, unlimited Mail storage — as it tries to prove it can be an advertising engine for other people's audiences, not just yahoo.com's.
First-order effects
- Yahoo gains one of the largest ISP-owned audience footprints in the US as a sales client, converting Comcast.net traffic into Yahoo-sold display and video inventory.
- Google loses the chance to expand its Comcast relationship into display, while MSN — reportedly in those same talks — walks away with nothing.
Second-order effects
- Other cable and broadband operators watching Comcast get a professional ad-sales operation without building one now have a template, pressuring Yahoo and Google to pitch similar outsourced display deals across the ISP world.
- Yahoo's salesforce becomes a competitive asset against Google's publisher network, shifting the battleground from search market share to who controls premium off-portal display inventory.
Third-order effects
- If broadband portals keep outsourcing ad sales, ISPs consolidate into media sellers whose value lies in audience access rather than content production — a structure that puts intermediaries like Yahoo between cable pipes and advertisers.
- The deal points toward display advertising consolidating around a few large networks brokering other companies' inventory, with portal-brand ad sales becoming a commodity handed to whichever network pays or performs best.
The trend: Premium web publishers are handing display and video ad sales to large third-party networks, turning ad brokerage — not owned traffic — into the contested layer of the online advertising business.