Yahoo-Microsoft Ad Delay – Trouble in Mobile Paradise?

There’s trouble in the Yahoo-Microsoft paradise. Both companies were supposed to sign a final deal for their joint advertising venture on Oct. 27, but the space above their dotted line remains empty.

Mobile search advertising is a large part of the deal, with Yahoo wanting freedom to use its own or other options outside of Microsoft AdCenter. But it isn’t clear Microsoft is ok with giving Yahoo the freedom to be “Itself!”

“Mobile is now regarded as much more important than it was even a few months ago,” Greg Sterling, president of Sterling Market Research, said to CIO Today. “With all the stuff around Android, Google is consolidating their undisputed leadership of mobile, so both Yahoo and Microsoft may be scrutinizing mobile more closely.”

Yahoo saw an 8% decline in display advertising and 19% decline in search advertising revenue (in all digital forms) in Q3 of 2009. Overall revenue for the third quarter fell to $1.58 billion, down 12% from $1.79 bililion a year ago.