Advertisers standing together against the Google/Yahoo Deal

So, for those of you who don't know about the partnership between Google and Yahoo read the next few lines. If you know about it then skip to the next paragraph.
Basically - Yahoo and Google entered into a partnership in which Google will provide advertising placed alongside search results on the Yahoo site. This is been reviewed by the Justice Department in the USA and they have yet to reveal any results into any anti-competitive behaviour. Google announced confidence in the legality of the deal last month and stated that they were planning to move forward in October regardless.


Individual companies have not been prepared to stand up against the partnership and complain but rather have kept quiet. The biggest complaint so far has of course been from Microsoft until now. The Association of National Advertisers (ANA) came out yesterday against the partnership.

The ANA, a trade group that represents companies including Procter & Gamble Co., Wal-Mart Stores Inc., and General Motors Corp., sent a letter to Assistant Attorney General Thomas O. Barnett yesterday recommending that the deal be blocked.

The letter claims that “a Google-Yahoo partnership will control 90 per cent of search advertising inventory," and argues that the merger would be bad for advertisers.
The partnership "will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising," the letter continued.

Google voluntarily submitted to a Congressional investigation when the deal was completed in June as a courtesy, but the company has said that it was not legally necessary.

While competitor Microsoft has already voiced displeasure with the plan, the Wall Street Journal thinks this complaint may hold more weight:

“As they weigh comments from outsiders, regulators often discount the views of competitors who complain about a deal, as Microsoft has done. They are likely, however, to listen closely to customers, in this case major advertisers, so the association's letter could be a significant hurdle.”

Yahoo responded to the letter on Sunday:

"We are disappointed with the ANA board's position regarding Yahoo's non-exclusive search marketing agreement with Google... Yahoo remains steadfast in its belief that this deal -– in which prices are determined by advertiser demand-driven auctions, and not by collaboration between Yahoo and Google -– will strengthen Yahoo's competitive position in online advertising and will help to drive a more robust, higher quality Yahoo marketplace for our advertisers."

I myself don't think the deal is a good one and would prefer Microsoft to eventually buy out Yahoo - reasoning is that Google needs some competition and its going to be harder and harder for Microsoft to compete without some acquisitions.

Photo: Flickr/dannysullivan