Old Clients Pay for New at Yahoo, Google

SEARCH inflation could be fuelled by massive advertising giveaways from Google and Yahoo! Google started the ball rolling by offer new clients $75 in AdWords advertising. Soon after Yahoo! up the ante to $150 with the same proviso – that current clients were not eligible. Supposedly there are 1.5m eligible businesses in Australia.

Justin Hind, from search marketing agency Downstream, told The Australian this means existing customers are effectively paying for their rivals to trial the medium. "There's marginal cost (to Yahoo and Google) because they're not producing anything," Mr Hind said. "They could reap all of their revenue back just from 3-5 per cent price inflation.” And get a lot of free PR. Search Engine Room: May 5, 2009