Gfanatic

Fake!

That was what most commenters said after seeing David Naylor’s screenshot of a Yahoo Answer page with a Google Ad in it. In fact, the screenshot now appears to be true after Yahoo announced on June 12 that they would run Google Ads alongside their search results and on some of its pages in US and Canada, as part of their non-exclusive agreement with Google.

The screenshot posted by David (see image above) was probably taken during the two-week long test run by Yahoo, which only involved a limited number of queries. Since the test run had brought great results, Yahoo will start serving ads from Google three months from now.

The agreement, which has a period of up to ten years, is expected to generate about $800 million annual revenue for Yahoo, and $250-$450 million on its first year.

With those big bucks they’re getting, the decision isn’t bad after all.

But just imagine the reactions of Yahoo users, especially those who are sick of Google, when they’ll see their favorite search engine running ads from its biggest competitor. Is Yahoo insane? Or is Google getting more evil?

I believe most Google fans would think Yahoo is finally admitting defeat to Google and this is an act of suicide, while Yahoo users would think that Google is getting more evil by slowly conquering and monetizing too much of the web. If Ask.com is running Google Ads. YouTube, AOL, MySpace… the question now is: how many search engines aren’t running Ads from Google?

Yahoo assured everyone though that they are still in control on which search term queries, and on which pages they may offer Ads from Google. Also, both search engines emphasized that their agreement preserves competition:

Yahoo says their non-exclusive agreement with Google will strengthen their position in online advertising.

Google says they simply think that such agreement would be good for users, advertisers, and publishers, and good for competition.

So, what about the revenues Yahoo will be getting from running Google AdSense? Well, they are going to use it for improving their search engine. A clever move eh, after dumping Microsoft’s acquisition offer?