Google-Yahoo! deal 'could drive IM marketing'

17th June 2008

The Google-Yahoo! tie-up could set the stage for the growing prominence of instant messaging in the social networking advertising arena, one analyst has said.

As well as enabling the display of Google ads on Yahoo!'s search results, the new deal lets users of each firm's IM device converse with each other online.

Karsten Weide, an analyst with IDC, has commented on the growing significance of social networking tools such as instant messaging (IM) for target ad campaigns.

The expert explained that marketers could soon be able to use information about IM use to target ads to users - for example, based on products their top IM contacts have purchased.

"From what we know anecdotally, ads based on social networking are more effective than behaviour targeting," the expert pointed out.

Microsoft has raised concerns about the impact of the Yahoo!-Google tie-up on competition in the search advertising sector, pointing out that Google could now control the vast majority of the business.

However, the IDC statistics suggest that the search giant could benefit from Yahoo!'s lead in the IM sphere, with Google commanding a five per cent market share compared to Yahoo!'s 23 per cent.