Yahoo has announced its new pay-per-click product: Yahoo Search Marketing (SM). This product was formerly known as Overture, but it was recognized as Goto.com, the name it had initially. Advertising with Google Adwords has resulted in higher conversion rates than with Yahoo Search Marketing (SM). However, both programs have advantages and disadvantages. The features that differentiate both are as follows :

BIDDING

Yahoo SM
• Yahoo places your bid at 1 penny over your next lowest competitor. Thus, if you bid $3.00 per-click, and the next highest bid is $1.95 per-click, you will only pay $1.96 per-click.
• Yahoo allows you to see who you are bidding against and what they are bidding, so you know exactly where you will rank, and how much you will pay.
• Yahoo's maximum bid is $999.99
• Yahoo's minimum bid is $0.10

Google AdWords
• Google doesn't tell you how much you will pay-per-click. Thus, if you bid $3.00 per-click, you will pay anywhere from $0.05 to $3.00 per-click.
• Google does not allow you to know how much your competitors are bidding per-click.
• An advantage with Google is that you will rank higher if your click-through rate (CT rate) is better (a CT rate is the ratio of clicks on your ad to the number of times your ad is shown). Thus, you may have a better rank than your competitor, even if he or she bids more than you (because of your CT rate).
• Google's maximum bid is $100.00
• Google's minimum bid is $0.05

LOW CLICK-THROUGH RATE DROPPING

Yahoo SM
• Yahoo will drop your key phrase if the CT rate is ranked very low for a significant period of time. Your key phrase has to perform quite dismally for it to get dropped.

Google Adwords
• Google drops key phrases with potentially low CT rates. If Google deems that your key phrase has done poorly for other customers, then your keyphrase won't even get the chance to make a single impression. The flip side, of course, is that if your keyphrase's CT rate is good, you will get a higher ranking (even if you bid lower than your competition).

SHOWING ADS BY COUNTRY AND LANGUAGE

Google AdWords
• Google allows you to choose your country and language by selecting them in a dropdown box. Very simple, very efficient, and very effective.
• The language is based on the language setting of the visitor's computer. For example, if you are targeting Spanish Americans, than you will want to target the Spanish AND English languages because many Spanish Americans use English computers. Just make sure that you choose Spanish-only keyphrases.

Yahoo SM
• Yahoo's system for countries and languages is completely down. You have to re-register for every country (and only twenty countries are available).
• You have to re-submit all your key phrases and reset all your bids.
• What's more, each country has different criteria for submission. This means you have to rebuild your campaign for the USA, UK, and Australia.

REPORTS

Yahoo SM
• Yahoo offers many useful reports. And while you can find just about everything you might need, it's left up to you to figure out which report contains the information you were looking for.

Google AdWords
• Google offers customizable reports. You can ask for anything you want, and you will get it.
• They also offer to email you your customized report on a regular basis.

COMPETITION
• FindWhat is possibly the third biggest pay-per-click (PPC) search engine, although there are a few that might be its equal: Kanoodle, GoClick, 7Search, Search123.
• E-spotting is very big in the UK, and competes heavily with Google and Yahoo in the PPC marketplace.
• MSN is getting ready to launch its own PPC engine to compete with Google and Yahoo (MSN currently uses Yahoo SM on its site

SUMMMARY

To sum up, you have more control over your monëy with Yahoo's system. It is more open and honest, and you will pay less per-click than with Google's system. Google does not tell you why you are paying, what you are paying, but it does have the added bonus of rewarding you with rank for a better converting ad.

Clearly then, Google AdWords is a better choice if you are interested in clicks, impressions, and conversions. If you want the lower cost-per-click for the same position, it would seem that Yahoo is the better choice (though conversions are lower).