Yahoo! has struck a landmark deal with media conglomerate Viacom, paving the way for the search engine company to become the exclusive provider of sponsored web search and contextual ads for a range of Viacom sites.
This deal, seen by many as a snub against Google, can hardly come as a surprise considering the recent Viacom lawsuit against Google's own YouTube service.
An initial sponsored search agreement with Yahoo! covers Viacom's most valued assets, including MTV.com, Nickelodeon.com, Comedycentral.com, VH1.com and BET.com, with an option to expand the deal to reach a potential 140 additional Viacom sites worldwide.
This service is to be offered on Yahoo!'s new Panama search engine marketing ad ranking system, launched in February 2007. Adopting a slightly different approach to its previous ranking system, the Panama algorithm displays the ads in an order based on the fee paid for the ad and the relevance to the query undertaken.
Panama has been rolled out across the US, with the rest of the world expected to benefit from the system in the second half of this year. Whilst Panama seems to be working well for Yahoo!, it's hard not to consider the aforementioned difficulty Viacom have had with Google as the basis for their decision on working with Yahoo! on this significant multi-year deal.
Philippe Dauman, the President and CEO of Viacom said upon the announcement:
"This far reaching partnership brings together world-class content and technology for the benefit of users and advertisers alike. Yahoo! has made impressive strides with its new search marketing system. As a global leader in content for every screen and platform, we couldn't be more pleased to have them as a partner and we look forward to growing our relationship even more over time."
Yahoo! has been actively expanding their corporate partnership portfolio for some time now, in the face of similar announcements with their long standing rival, Google. It is evident that both companies know how to form partnerships with some of the biggest names in the media and, whilst this is just the beginning of a new form of collaboration, it's clear that some market leaders don't want to wait to get in on the untapped resource of contextually driven revenue.
