No mention of search at all. A year ago, Mayer was going to put Yahoo back in the search business.[1] Yahoo resells Bing search, for which Bing pays Yahoo. Yahoo's own search engine was discontinued in 2010. The deal with Microsoft/Bing is up for review, and Yahoo has the opportunity to exit. Yahoo hired a new head of search last year, but his area of expertise was negotiating with Microsoft. The Yahoo search announcement seems to have been a bluff to get a better deal from Microsoft/Bing.
Honestly, search is not a market I'd ever want to get in. Even if you build a strong ad network for it, ads are paying less and less and unless you have a new approach that give results that are a quantum leap better than google, you're going to fight a losing battle.
I mean, after Google, Baidu has ~11% of the market (and actually gives passable results for English), Bing has ~10% (after spending billions), Yahoo has about 9%, but is basically just Bing (so maybe Bing has 19%?) and after that there's AOL, Ask, Lycos, Excite there's also Yandex, Naver, Exalead, Gigablast, Munax, Qwant, Sogou, Soso, Youdao.
There's also Metasearch engines: Blingo, Yippy, DeeperWeb, Dogpile, HotBot, and a dozen more.
There's tons of language or geographic specific specific ones: Biglobe, Accoona, Goo, Miner.hu, Walla!, etc.
And then there's all the specific engines like Yelp, CareerBuilder, Glassdoor, and hell, Reddit's search even counts given how much content is on Reddit these days.
This is not a space I'd want to fight in, search is fracturing, the monetization story doesn't look good long-term, and nobody seems to have figured out a way to search that's fantastically better than keyword + some graph weight + heuristics
If I were Mayer, I'd be looking for a way out of search as fast as possible.
Search with ads is a profitable business, even if you're small. All those little guys, such as Lycos, InfoSeek, and DuckDuckGo are modestly profitable. Search ads are inherently more valuable than most other ads, because they're displayed when the user is actively looking to buy something. Most other forms of advertising are annoyances.
The economics of the search industry are strange. Google pays Apple to be on the iPhone. Yahoo pays Mozilla to be on Firefox. Microsoft has their own browser, which comes with Bing as the default. Search as a service thus has negative value. Google is like the Jewelry Channel, which pays cable companies to get a channel. On the other hand, ESPN and HBO charge cable channels; the money flows the other way.
It's very likely that Google's search CPC rates have been falling or stagnant for years. Given the size of search in the makeup of their ad revenue, you can hardly have falling CPC rates for 3.x years without search being partially responsible (at the absolute minimum, rates are stagnant in search).
People are overreacting to this. The drop in CPC is coming from getting MORE business in developing regions (which means lower cpcs & lower avg across the board). Certainly doesn't mean Google is making less money.
> We know most of Google’s growth is coming from outside North America, which means they are adding search volume but at a much cheaper auction than their established business. North America business is very strong and has seen CPC inflation for the desktop search — due to plateauing inventory and higher prices on things like PLAs.”
Parent comment is talking about the entire ecosystem - not the specific markets.
As new markets emerge, it's less competitive (in those markets) and then prices drop (which drop the avg).
In general, CPC doesn't mean much if you talk in total aggregate (you need to look at the specific markets) and CPC still doesn't address volume (which is the other half of the equation).
I'm guessing most of the people decrying the search ads are doing so from anecdotal evidence rather than statistics.
This year, search doesn't even get a mention.
[1] http://money.cnn.com/2014/02/11/technology/yahoo-mayer/