Just two years ago, Yahoo spent $79 million to rebuff a hostile takeover from Microsoft and preserve its independence. Now, a big part of Yahoo’s future prosperity depends on how well it can join arms with Microsoft on a high-risk, high-reward technical project.

Yahoo and Microsoft are racing to meet a fall deadline for launching their joint venture to collaborate on Internet search, an effort by the former rivals to try to narrow the gap with their much stronger, common foe: Google.

The effort — including the retraining of hundreds of Yahoo salespeople to sell ads for both companies, and a conga line of about 400 engineers who are relocating from Yahoo to Microsoft offices in Silicon Valley; Bangalore, India; Burbank; and Redmond, Wash. — needs to be complete by mid-October if the two companies hope to have the show up and running before the start of the holiday season, the critical make-or-break period for advertisers and publishers.

At stake in the joint venture, Yahoo executives say, is the company’s ability to become an innovative force in search again — something Yahoo acknowledges it can no longer afford without its partnership with Microsoft’s Bing search engine. The 10-year partnership has Bing providing the underlying results of Yahoo searches, with Yahoo retaining control of how those results are displayed.

But outside observers say more than just Yahoo’s reputation in search is at stake. Considering the revenue and traffic represented by Yahoo’s 3.1 billion U.S. monthly search queries, the search partnership represents a critical gamble by new CEO Carol Bartz to grab a bigger piece of the search revenue pie. During the first half of 2010 compared with last year, Yahoo’s search ad revenue declined by 11 percent, or $84 million, to $674 million, even as the economy improved. Both Bartz and Microsoft CEO Steve Ballmer have made the search transition a top priority for both companies, executives say.”Really, there is a tremendous amount at stake here for both players,” said Laxmi Poruri, an analyst with Primary Global Research. “There are search engine advertisers out there who are eager for this. They want to spend more money on Yahoo and Bing. The problem is these guys (individually) aren’t getting enough traffic for them.”

If the companies miss the mid-October deadline, they say they will be forced to delay the switch in the United States and Canada until 2011, sacrificing the lucrative holiday advertising season. But Poruri said Yahoo also is under pressure in the long run to continue to generate search traffic for Bing. “If the technology is a disappointment or the traffic acquisition is a disappointment, then Microsoft will go somewhere else to get that traffic,” Poruri said.

Both Microsoft and Yahoo executives say the switch-over is going as well as could be expected, and Yahoo says that all of its search traffic, apart from paid search, could be powered by Bing as soon as the end of August. Still, Mark Morrissey, the Yahoo senior vice president in charge of the company’s transition team, said engineers are sometimes pulling 48- to 72-hour stints to hit key milestones.

“I can tell you, far and away, this is the most complex logistical and technical thing I have ever been a part of,” said Morrissey, who also handled Yahoo’s switch to new systems for its paid search ads and display ads.

“All our day jobs are really that at this point,” said Satya Nadella, senior vice president of Microsoft’s Online Services Division.

The Yahoo-Microsoft alliance represents an unprecedented effort by two former competitors to join forces, but it has become increasingly necessary because of Google’s dominance. Google now provides about two-thirds of U.S. Internet searches, and an even higher share in many other countries.

Under the collaboration, Yahoo receives 88 percent of the revenue from searches done on Yahoo sites in the first five years, while saving the heavy costs of the computer infrastructure needed to crawl, index and rank the Internet. Microsoft receives the still-significant search traffic flowing through Yahoo. That is valuable because the more queries a search engine processes, the more relevant its answers, and the more extensive variety of keywords it can sell to advertisers.

Microsoft’s costs for Bing have been huge. Its online services division, which includes Bing and MSN, reported a $2.36 billion loss in fiscal 2010. Meanwhile, Bing gained 4.7 percentage points in market share in its first year, to 12.7 percent of U.S. searches, according to comScore.

Yahoo says its long-term ability to build innovative search products hinges on the collaboration.

“It’s not about the transition,” Morrissey said. “It’s about the future of search, and where we want to go.”

With Yahoo’s share of U.S. searches dipping below 20 percent in recent years, few see Yahoo as a search leader anymore. But Shashi Seth, Yahoo’s new chief of search, says that is about to change. Seth says the collaboration with Microsoft will give Yahoo the resources to develop new kinds of search products that could mimic the serendipity of browsing a newspaper, a sense of surprise and discovery rarely found in the blue hyperlinks of a conventional search query.

One example, Seth says, are Yahoo’s plans to begin offering the “Trending Now” box on its home page to other websites, probably in the next two or three months. Yahoo updates the Trending Now box every few hours based on an analysis of its search traffic, but the featured topics are tailored to users based on geographic location and Web history, so different users see different trending topics.

“The goal is to get users to discover things that they never would have thought about,” said Seth, a former Google executive who arrived at Yahoo in February. “It’s a completely new kind of search experience, one where the user didn’t ask for anything.”

Others are also racing to offer new ways for people to search. Facebook and Ask.com recently introduced new “social search” features that allow users to ask questions of actual people, rather than just query a computer algorithm.

“We think as the social web continues to explode, this is only going to get bigger and bigger,” said Scott Garell, president of Oakland-based Ask Networks.

Some at Yahoo have been frustrated with the more centralized and hierarchical management structure at Microsoft. But despite their history as hostile competitors — Yahoo disclosed that it spent $79 million in 2008 on lawyers and “outside advisers” to respond to Microsoft’s unsolicited takeover bid — executives say the main challenge is the technical difficulty of the project.

“We’re mutually codependent,” Morrissey said, “on each other’s success.”

Source: Mercury News

When it comes to Main Street, finding a strip mall without two or three “For Rent” signs along it, is a rare occasion lately.   Sure, the sour economy has taken its toll on everyone from the local mom and pop shop to the Fortune 500s.  We know that unregulated big business brought down Wall Street.  But what broke the backbone of the US small business market? Why are small businesses everywhere continuing to fail?

I started to think about this after passing my town’s local pizza joint that recently became one of the many, “here today gone tomorrows” of our time.  Nonni’s had just revamped itself in hopes of generating more business – new flat screen TVs, a decorative paint job that put you right in the middle of southern Italy while indulging in your pie, and some fancy new furniture.  Unfortunately, the owner invested too much of his time and money in the wrong place.

Unless your over the age of 65 or just plain behind, you don’t use paper publications like the Yellow Pages to find what your looking for today.  Instead, we Google, Yahoo and Bing.  We use search engines that give us exactly what we are looking for (and more) in just seconds.  The problem, for many small businesses lining the sidewalks of Main Street, is that their products and services are not being captured by these search engines.  It’s surprising to see how businesses, from general stores to hair salons, don’t have websites (their most important store front and tool for moving up on the search engine ranks).

I understand they are called “small businesses” for a reason.  Localized, smaller centers of commerce and capitalism – plain and simple.  But today, thanks to technology and globalization, there’s really no such thing as being localized, especially if you want people to know you exist.  Bottom line, the small businesses who have remained too small (i.e., no websites or other forms of online advertising) well their time to get up to speed with the rest of the world has come.  Whether your a one man accounting firm or a 30 person nail salon – you need to advertise your services on the web.  The old pen and paper way of managing and publicizing your trade is out.

Let’s revisit poor Nonni’s to try and zone in on how this establishment could have potentially survived the technology tsunami and the recession.

1. If Nonni’s would have invested the $1,000 to $2,000 that originally went to flat screen TVs on a new website, they would have been able to establish a web presence, making it easier for customers to search for their services, order online and look up the shop’s phone number, address, menu, etc.

2. Having a website Nonni’s could have also hired or performed SEO on their website to help increase traffic to their site and essentially generate more business.

3. After getting more business/ revenue from their website, Nonni’s then could have gauged whether or not to invest in TVs and a new paint job based on whether their clients were coming in for pizza or ordering out.

4. After expanding and hiring a larger staff to deal with increased business, Nonni’s could have had a CRM or Customer Relationship Management designed to help more efficiently run their business.  CRM systems could be used to keep better track of inventory, staffing and employment needs like hours and payroll, as well as manage a client and customer list of emails and other contact info to email blast their customers about promotions, new events at the store, etc.

Lesson of the day: small businesses need to focus on their digital store front in order to keep their actual store front up and running in today’s day, age and economic times.

What is pay per click? When you go to google and type in “web design westchester” you see the top sites come up in the white. The two sites on the top and the website ads on the right is what pay per click is. Those people actually pay to get their website in those areas.

Is pay per click worth it? Most of the time you lose money before you actually make money. The reason is because you have to experiment which keywords, ad copy, and bid to place that will give you the most customers. When I say customers I mean people who are going to purchase your products or services, not prospects (people who are just looking). I normally tell people to try it out and keep track of how many people are turning into clients. You can run daily, weekly, or monthly analysis using Google Analytics.

What keywords do I use? When you are searching for the right key words to use for pay per click it is important not to go straight to the “good deal”. Why? Because a lot of the times those keywords are cheap because they don’t hold as much value as other more expensive keywords. A lot of times I look at competition and what they are putting on their ads (it’s not cheating!)

Is pay per click important? I think the people who use pay per click for the easy key words, such as web design Westchester, is wasting their money and time. It takes a little bit of work to get to the front page, however it can be done. If you cannot do it yourself spend the few hundreds of dollars and have a professional do it (like me). I think it’s worth it to spend the money on an SEO specialist to get you to the top, but then again there are negatives. It is up in the air if it will save you money, however think about this how often do you read or even bother to look at those ads? I know my answer is that I never do! Sometimes I’ll click on my competitor’s ads just to click it and make them spend the dollar (I know it’s cruel)! But anyway that’s about all the interaction I have with that portion of Google. Besides you are paying anywhere from 20 cents to 5 dollars (depends on the keyword and how many people want it) to get seen! Well let’s just do an average of 2 dollars… Are you telling me that you are going to spend 200 dollars for every 100 people that come to your website? I guess it really depends how many of those people turn into customers. But the point is SEO really isn’t that difficult once you get the hang of it, it’s just a lot of work because there are so many people trying to get to the front page along with you. However, if you can get to the front page I recommend that instead of PPC and that’s my final answer!