Yahoo launches PPC Pricing Discounts in UK

I've just received an email from Yahoo regarding the rollout of the "Pricing Discount" feature across the Yahoo network. This feature will discount search and content traffic from Yahoo's partner sites, depending on the perceived quality of that traffic. So, in the case of a partner site Yahoo deems lower quality (in terms of the traffic it gives advertisers), you will receive a discount on your CPC for any traffic from that site.

Two important points spring to my mind from this:

1. Yahoo will decide which sites deliver quality; they will do this based on "conversion rates and other measurements of a site's ability to deliver you more valuable customers".
2. Pricing discounts apply only to sites on the Yahoo network, not Yahoo itself

The issue I have with point one is - how will they determine conversion rates? If they're using their own tracking tool data (Yahoo Sponsored Search Conversion Tracking or perhaps their Yahoo Analytics package) then their data sample will be very small, and perhaps not representative of a site's true "quality". If they're using other data, what data are they using?

The second point, to do with discounts only being applied to partner sites, and not Yahoo.com or Yahoo.co.uk itself raises some questions. For example, if the main Yahoo search engine delivers low conversions for advertisers in a particular industry, should its clicks not be discounted also?

The move is however, on the whole, a positive one. Will it help Yahoo in its battle with Google? Probably not, but these kind of paid search innovations will definitely take them in the right direction.