A few months ago Yahoo announced their version of a contextual advertising program and begun signing up publishers for the beta program. Finally, a couple of days ago I was invited to join the beta program known as Yahoo Publisher Network, a.k.a. YPN. YPN is a direct competitor to a similar product, Adsense, by Google. These services display relevant text advertising on the publisher's Web pages and site owners collect a cut from the users' clicks.
With Yahoo entering the contextual advertising market and rumors of MSN planning to do the same, Adsense is suddenly no longer the only game in town. I have started to periodically alternate between Adsense and YPN ads on this very site to gauge the effectiveness of YPN vis-à-vis Adsense. It's too early to tell, but so far it appears that YPN is delivering more dollars than Adsense. Maybe Yahoo is just sharing a larger cut with the publishers or their ads are more enticing to users, but this may not bode well for Google which draws most of its revenue from advertising. There is no question that publishers would follow whomever gives them a fatter check and would abandon the rest.
Unfortunately the Terms of Service(TOS) for both services forbid mixing contextual ads from different sources on one page at any given instance. I have seen some sites with ads from both services but that's an obvious violation of the TOS. In my case I'm fairly certain that as long as pages display ads from one source at any given time, that's acceptable.
I can't help but believe that over time these companies would modify their exclusivity TOS to allow mixing. That would lead to a win/win/win situation. It's a win for users as they are presented with relevant ads from multiple sources, a win for publishers as they increase their chances of getting clicks, and a win for the networks as they won't get locked out of certain sites.
Competition is always a good thing, and while Adsense has been a great product, it could get even better now that it has a new rival and perhaps another on the horizon.