Yahoo! Publisher Network Dies

Just got this via email:

Yahoo! continuously evaluates and prioritizes our products and services, in alignment with business goals and our continued commitment to deliver the best consumer and advertiser experiences. After conducting an extensive review of the Yahoo! Publisher Network beta program, we have decided to close the program effective April 30, 2010. We expect to deliver final publisher payments for the month ending April 30, 2010 to publishers no later than May 31, 2010. All publishers eligible for 1099s for the 2010 tax year will have those mailed by January 31, 2011.

Because our content will no longer be delivered to your ad unit spaces after April 30, 2010, we recommend removing all YPN ad code from your pages by that date.

For the opportunity to continue earning revenue, we suggest using Chitika, a leading advertising network that syndicates Yahoo! Content Match and Sponsored Search ads. Chitika has set up a special process for YPNO beta publishers to participate in its platform. Click here for more information.

Sad to see Yahoo! either bowing out from and/or outsourcing so many of their businesses. Given Yahoo!’s huge reach as a publisher and the idea behind audience matching at the likes of Quantcast, Yahoo! should have been fairly well positioned to run a distributed ad network. But since they sold off search they just keep cutting pieces. I would have thought that running a contextual network would have been additional free volume Yahoo! made while creating optimization algorithms for their own properties.

Given their pending tie-in with Microsoft, it is a bit surprising to see them recommending Chitika (though the recommendation is a nice win for Chitika). Part of selling the search tie up deal with Microsoft was the idea of economies of scale driving increased yields. And now AdSense (which is already probably at least as dominant in contextual ads as Google is in search) just lost another competitor. For as saturated as online ad networks are, it is surprising that AdSense has such a big lead and that Microsoft didn’t make catching up with PubCenter a higher priority.

Creating a distributed ad network would give Microsoft 5 big weapons in the search game

• collecting lots more data about the web
• more direct relationships with many webmasters
• forcing Google to cut their margins on the distributed ads (if they want to bleed you dry on Office then reciprocate the favor on their AdSense ads)
• the ability to have a network to re-target searchers on
• having a backfill set of inventory to do some home cooking, promoting new releases and the Bing brand for pennies on the Dollar, just like Google did with Nexus One

One strategic positive for Yahoo! is that they have pushing harder into the original content development, but if they become more profitable with that will some of their content licensing partners start increasing their rates?

And if there is any sorta sustainable economic rebound (doubtful), then I would give it 2 to 1 odds that Yahoo! buys Chitika in the next 3 years 😀