Following the just-released announcement confirming a Google (NSDQ: GOOG) deal, Yahoo (NSDQ: YHOO) is holding a call with analysts explaining the call. Said CEO Jerry Yang: The Microsoft (NSDQ: MSFT) deal was over: “Clearly it is time to move on.” Although the agreement doesn’t require regulatory approval, the companies are waiting 3.5 months before getting going to deal with any regulatory concerns.
Decker picks up: “(A) hallmark of this agreement is its Flexibility” It allows the company to take advantage of areas where Google does well, i.e. the tail. “In essence, we improve our access to the paid search universe” (but on good terms to Yahoo). Very quickly Decker has moved off the Google deal, talking up AMP, newspaper consortium, and Yahoo’s efforts at being a ‘must-buy’ (this sounds like a typical prelude on an earnings call, at this point).
Q&A: lots more after the jump…
– Why will advertisers go to Yahoo directly? Decker: “Yahoo monetizes very competitively… but not as competitive in the tale” (due to scale). The deal offers the best of both worlds. There are multiple components of this deal… a possible part of this deal may be to help with display ads on Google.
– What percentage of queries?: Not disclosing an exact number at this point. And the added cash flow all comes from added revenue, not so much from cost savings.
– TAC split: Decker: “I think it’s fair to say that it’s a competitive TAC split… and both parties felt it was a competitive opportunity.”
– Are there minimum guarantees?: Can’t comment specifically on the financial terms.
– Regulatory hurdles: Yang: We believe that given it’s a commercial business transaction, so there’s no regulatory issue… but, voluntarily we have agreed to provide information to DOJ.
Call done. Bottom line: It’s a flexible deal that allows Yahoo to monetize certain queries where it’s weak (the tail, as they said several times), and they’re also open more third party advertisers down the road. Oh, and it’s flexible, in case you didn’t get that.
You can download or listen to an mp3 of the 25-minute conference call.