Today it was announced by Google Asia Pacific and Japan vice president Daniel Alegre that Yahoo Japan would switch at the end of the year to using Google Japan’s search engine results. Sometime next year, Google’s text ad system, Adwords will also replace Yahoo Japan’s Sponsored Search listings.

The announcement ends speculation that began last summer after the announcement of the MicroSoft Bing / Yahoo parent company agreement. Apparently one of the clinching factors in the surprise decision to snub the MicroSoft’s search platform was Google’s better localization. “Google is one step ahead in Japanese-language services”  reported Masahiro Inoue, chief executive of Yahoo Japan.

So what does the Google / Yahoo deal mean for website owners targetting the Japan market? Let’s look at two aspects; natural search results and pay per click search results.

1) Natural Search

For starters, any company which has been getting good search rankings in Yahoo Japan but poor rankings in Google Japan needs to have a strategy in place. It’s not uncommon to see very different listing results between the two search engines, currently.

But does this mean that we are going to see just one consistent set of search rankings for the 90% of search queries that Google Japan and Yahoo Japan currently capture? Not necessarily. In his post Mr. Alegre also said the partnership highlighted a lesser-known part of Google’s business: the licensing of Google technology to rival search engines. Yahoo Japan will “be able to customize Google search to provide its own search service, one that fits its own users,” he reported. So it seems at least possible that Yahoo Japan might tweak the Google search algorithm in some way that differentiates the results from the Google Japan site.

2) Pay Per Click Search

The announcement is mixed news for advertisers, particularly those based outside Japan.

One effect will undoubtedly be to drive up pay per click campaign budgets, since everyone will now be competing for keyword ad positions on the one platform, Adwords.

On the other hand, Yahoo Japan’s sponsored search campaign management tools are arguably inferior to Google Adwords in terms of ease of use and functions. In addition, Yahoo Japan Sponsored Search policy, as of recent months, has been to only accept payments from domestically issued credit cards or local ATM transfer; a frustrating set of arrangements for external advertisers that many will happily watch disappear.

http://www.nytimes.com/2010/07/28/technology/28yahoo.html?src=busln

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