Yahoo Signs Google Ad Deal as Microsoft Blasts Google Practices

Yahoo CEO Marisa Mayer struck an ad deal with former employer Google, just as Microsoft launched a campaign to sour consumers on Google's practices.

Yahoo has signed a contextual advertising deal with Google, just as Microsoft launched a campaign to raise consumer awareness about the practices Google uses to make its contextual ads user-specific.

Google ads will now appear on Yahoo properties and co-branded sites using Google's AdSense for Content and AdMob services, and will receive a portion of the revenues generated from the ads displayed on its partner sites, Zacks Equity Research reported Feb. 7.

Yahoo CEO Marissa Mayer, the company's fifth CEO in four years, is a former Googler who understands well what Google can bring to Yahoo. During a January interview with Bloomberg Television during the World Economic Forum in Switzerland, Mayer said that Yahoo "has always been a very friendly company," which will help it to create partnerships in areas where it's lacking in assets.

In a statement, Yahoo said the deal will enable it to expand its network so that users will see more meaningful ads.

"Say you've been shopping for boots. if you see an ad for boots, that's instantly going to pique your attention more than an ad for, say, a car battery," Yahoo said in the statement. "That's better for users."

Microsoft recently revived its "Scroogled" campaign, this time focusing on the way Google creates targeted ads in Gmail by scanning emails sent and received through Gmail accounts.

"Email between a husband and wife, or two best friends, should be personal. But Google crosses the line and goes through every single Gmail. ... And there's no way to opt out of this invasion of your privacy," Microsoft says in a video on

The Microsoft campaign paints Google's practices as not just invasive but not always effective. It offers an example of a Gmail in which someone shares that the family cat, Calico, has just been put down—and a "targeted" ad in the banner.

"Who wants a free pet exam, when the family cat has just been put down?" asks the announcer.

How Google will target ads to Yahoo users is unclear—Microsoft targets ads in its email service using less-specific demographic information provided by users at sign-up, such as ZIP code and gender.

Mayer, during her interview in Switzerland, said that regarding issues of privacy, it's critical for companies to offer users transparency, control and choices.

"I think that privacy will always be something that users should consider, but I also think that privacy is always a trade-off, because when you give up some of your information you get some functionality in return," she said. "So it's really about making those trade-offs in a very informed way."

Regarding the deal with Google, Zacks Equity Research added that although it could have a positive impact on Yahoo and help it to generate additional income, "We will take a wait-and-see approach because Yahoo is still struggling despite Mayer's sincere efforts on all fronts."