Eyeballs 2.0 – Boom or Bust?

Yahoo, should have been the king of online advertising, it is not. It should have owned the market now dominated by Google’s Ad Sense. It does not, but has now launched a comprehensive plans to compete with Google in the market place. Search Engine Blog has an indepth look at the new Panama Platform, which points out that the new platform will start going live in the third quarter and fourth quarter.

There’s no timeline on when rankings themselves will shift to being more Google-like, where ads will show ranked based on a combination of clickthrough rate, the amount being bid and other factors.

Last week, Microsoft decided to jump into the fray and launched its Ad Center offerings. Since Microsoft and Yahoo have search engines, it makes sense for them to monetize them more effectively.

Ultimately, as long as there is more demand than search inventory to go around (as is largely the case today), anyone with a major unique ad network is going to be successful. It only becomes a more zero sum game when there is more inventory than demand.

But lets look at world beyond search. Google’s got a big cash machine going with its adsense program. It is only a matter of time before Yahoo and Microsoft try and muscle in on this business.

On paper, this should be welcome news for publishers, after all we have been told competition is a good thing. Publishers should theoretically get bigger cut of the advertising revenues, and advertisers should be able to get better keyword pricing. But…. okay now this is a big but….. The problem is that if three companies are chasing the same advertising dollars, the keyword prices would go down, which theoretically means, the publisher cut of the revenues are going to go down. Ergo…. problems down the line. Will this mean end of the eyeball boom 2.0?

What are your thoughts?