Yahoo enters the Israeli market, forfeits brand recognition

As you might know, this blog has WebTipr’s all over the world who tip us whenever something interesting happens in their country. Today, Yaniv Solnik from Israel emailed me that Yahoo is entering the Israeli market. They’re opening a new research and development office in the Matam high-tech park in Haifa, next to rivals Google and Microsoft.

In an attempt to break the dominant position of Google, Yahoo is partnering with Israeli’s leading portal Walla. Yahoo’s search engine will be embedded in the portal. The remarkable thing is that search engine’s name will remain the same: Walla Search. This implies that Yahoo is purely aiming for the search-advertising market and not so much for brand recognition.

This development in some ways supports Jimmy Wales’ statement about quality search he made in an interview I had with him recently, where he argued that quality search is becoming a commodity. Perhaps it’s no longer necessary to market a search engine on its own because every big engine out there has a certain quality by now. It’s just about getting a piece of the search-advertising pie.

And the pie is pretty good in Israel: the Israeli Internet advertising was estimated at $90 million in 2007, 10% of the total advertising. Of this figure, search engine advertising took about half, $40-50 million, the large majority of which went to Google. There’s also a lot of technical talent in Israel, with companies such as Incredimail and ICQ being spawned from that location.

So what’s next? Will Yahoo do the same in other countries?

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[WebTipr: Yaniv Solnik, Israel]