ChasNote

From AllThingsD:

“CNET Networks will also announce a much expanded editorial and advertising relationship with Yahoo that will give the tech news site broad distribution on the highly trafficked Internet portal…..

“Under the new deal, sources at both companies said a large swath of CNET tech news and also reviews will be carried on Yahoo, making it the major supplier of tech news content to the site. Rather than just focusing on its owned-and-operated properties, Yahoo’s more recent strategy has been to partner with media companies.

“In addition, under the terms of the deal, Yahoo will sell some of CNET’s remnant inventory and also allow CNET ad sales staff to sell into some areas of Yahoo.”

Smart.

It suggests each company has begun to recognize its strengths — and begun to get comfortable with its weaknesses. Yahoo has enormous audience reach (it’s a portal) and sells lots of banners at low CPMs (it’s a giant ad network); it isn’t a leader in original content or high-CPM brand advertising. CNET has a great sales team that generates very high CPMs around premium tech content and an award-winning editorial team (it’s DNA is that of a niche publisher); it isn’t big enough to make the high volume, low CPM ad-network model work outside the core tech sites.

It’s a shame — given all the recent news at both companies — they didn’t do this sooner.

From Times Online UK:

“What’s surprising, though, is that the pure-play internet media companies that might have been expected to benefit from the tectonic shifts in the industry have done badly too. Yahoo!, CNET Networks and Interactive Corp all seemed to be in a great position three or four years ago, and yet all three look like they’ll soon cease to exist in their current form as investors express their displeasure with poor stock performance.”

“Part of the explanation for this is simple enough. Yahoo! and CNET could be considered new media versions of old media models; they aim to drive large numbers of people to their pages with expensive investments in content, and monetise that traffic via display advertising. But low-cost blogs — especially in the technology news space that CNET once led — have scooped up a lot of the audience.”

FM, Huffington Post, PaidContent, TechCrunch and others are called out as alternative models.

Avenue A’s senior VP for global media isn’t worried about Microsoft buying Yahoo. Or, as the Silicon Alley Insider headline puts it, “Microsoft + Yahoo = Irrelevant.”

“”There’s a perspective that going from three portals to two is bad for buyers. But spend is actually moving away from portals and much more broadly across the web, so I’m actually not concerned about moving from three to two, because we are really moving from 3 to 800.”

More at Ad Age:

“For the first time in the past four years, portals lost share of ad dollars year over year — at least from Avenue A/Razorfish, which releases its latest Digital Outlook report today. The shift comes after years of ad-dollar consolidation with the largest players online. In 2007, 19% of Avenue A’s media spending went to portals, down from 24% in 2006.”

Here’s a keynote quote from Sunday’s IAB conference in Phoenix, as reported by Battelle, “We must not trade our advertising inventory like pork bellies.”

Great line, and important sentiment. Google has ushered in an era of ad-networkification of online advertising. Even erstwhile media companies, like Yahoo, that used to sell brand-advertising experiences have lost their way chasing Google deeper into CPC-land.

Wenda Harris Millard, former sales chief at Yahoo, puts it succinctly (PaidContent):

“This is absolutely inevitable, entirely predictable and it is all about what happens when you lose sight of what business you’re in and who your customer is. Yahoo’s monomaniacal obsession with Google and its thinking that Google was its only competitor led to this. In fact, (in) a company where 90 percent of your revenue comes from advertising, it would seem the primary competitor would be broadcast networks.”

And Yahoo’s not alone. Google has made nearly every online media company forget what brand advertising is.

Jon Fine, Fine on Media columist and blogger at BusinessWeek, on Yahoo and Microsoft:

“Ah, Microsoft-Yahoo. It’s truly touching to me how companies are forever believing that if you mate two dogs, you can make a pony.”

Ouch.