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And now . . . the continuing saga – how Yahoo and MSN can level the playing field against Google.

Step 2: Fix Your User Interfaces

Google’s traffic distribution is not the only competitive advantage Yahoo and MSN can attack. Google is currently light years ahead of both companies in terms of ease of use for advertisers. Google’s AdWords user interface is actually fun to use and keeps getting better and better (in fact, be on the lookout for a desktop beta they will be releasing soon).

The YSM interface, on the other hand, is one of the most painful tools ever created. Even the reps at Yahoo admit that it is virtually unusable. And, from what I have seen of the new MSN system, it is currently somewhere between Yahoo and Google, but probably closer to Yahoo than Google. I know many advertisers who spend more money on Google simply because they don’t want to put the extra effort into either using the YSM online interface or developing API integration with YSM.

Simply copying Google or investing a few million dollars in creating a faster and easier UI will increase budgets on Yahoo dramatically, at the expense of Google in some instances. The same will be true for MSN.

The result: decreased revenue for Google and increased revenue for Yahoo and MSN.

Tomorrow: Part three (of four).