Is the Google-Yahoo! agreement good for small advertisers?

My guess is a tentative, temporary yes.

If you aren’t clued in yet, Yahoo! and Google have come to an agreement that allows Yahoo! to display Google paid search results on keyword queries on Yahoo! Yahoo! can now tap into Adsense and Adwords. The agreement is for 10 years and is not exclusive, meaning that Yahoo can create similar agreements with other parties.

There are pluses and minuses to this agreement. But for now, let’s focus on smaller agenices that serve smaller businesses and smaller businesses themselves.

The upside is that there could be less to learn and more reach for small advertisers. Using paid search can get you results on Yahoo! It may be unnecessary to do anything broad-based. That’s a good thing. It may make it easier to enter the arena of local search.

As AdAge points out:

When Google search ads are mixed in with Yahoo search ads for a particular search query, Google will almost always win the better placement, according to search marketers, because it has a better ad-matching and monetization engine. And if Google consistently wins, marketers may be less inclined to bother using the Yahoo system, instead choosing to put their optimization efforts toward a single system. In other words, less to learn, less to manage.

That’s the good part.

Now the down side. It could get more expensive to place search ads. Google’s system tends to be more expensive – and effective than Yahoo’s! That expensiveness will now be extended into the Yahoo! sphere, likely devaluing Yahoo’s! own paid search results.

My thoughts are that, at least initially, this will bode well for locals who are looking to add paid search to their mix. I’m thinking that because I’m guessing the biggest barrier is lack of knowledge on how start off effectively…as opposed to cost.

But that benefit may not last for long if competition becomes to intense for localized keyword searches. Because this does decrease paid search alternatives.