A Google-only world won’t be pretty.
The writing is on the wall. Yahoo (NASDAQ: YHOO) has been floundering for years, and its market share keeps slipping to Google (NASDAQ: GOOG).
The two companies’ advertising agreement, whereby Yahoo will show ads on behalf of Google, will slowly erode Yahoo’s advertiser base. If the deal is approved by regulators, Yahoo will eventually cease to be a relevant factor in the pay-per-click marketing world.
That doesn’t leave domainers in a good position. Right now we’re in a bad position, counting on only Yahoo and Google for the bulk of our revenue. If Yahoo goes away, we’ll be in a terrible position. Get ready for the great Google squeeze.
I’m less concerned now that Google is going to suddenly exit the domain business. Several insiders have suggested that Google will just wait for Yahoo to become trivial and then start squeezing domainer margins.
Right now we have a choice: Yahoo or Google ads. If Yahoo’s advertiser base erodes to the point that it pays out on average 50% less than Google, Google can just dial back its revenue share with domain parking companies.
I don’t know how long before Yahoo becomes irrelevant. But right now you better hope and pray that Microsoft reinvigorates its attempt to takeover Yahoo.