labels: Yahoo!, Google
Advertisers opposes Yahoo-Google ad deal; authorities may take antitrust action news
09 September 2008

It seems that rival Microsoft is not the only vocal opponent to the recent Yahoo-Google advertising tie-up. A trade association representing the biggest advertisers in the US has sent a letter to anti-trust regulators opposing the deal saying such a collaboration would be akin to a monopoly controlling as much as 90 per cent of search advertising inventory in the country.
(See: Yahoo strikes $800-million ad deal with Google, ends talks with Microsoft and Microsoft opposes Yahoo-Google deal, reveals another rejected stake plus search offer)

The Association of National Advertisers (ANA) said Monday its board has registered with the US Department of Justice its opposition to the much-publicized deal. The ANA is a trade association that represents 375 companies with 9,000 brands that collectively spend over $150 billion in marketing communications and advertising.

New York-based ANA said it sent a letter to Assistant Attorney General Thomas O Barnett, citing concerns "that 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."

ANA said it "conducted a comprehensive, independent analysis designed to represent the perspectives of the broad advertiser/marketer community. It included input from the board's members and face-to-face discussions with Google and Yahoo."

''We believe that the overall impact of this deal is a negative for advertisers and the marketplace,'' said Robert Liodice, ANA president and CEO.

This letter has been interpreted in the US as a blow to the deal because until now major marketers have been reluctant to publicly voice disapproval because of Google's power in the online advertising market.

"We are disappointed with the ANA board's position regarding Yahoo's non-exclusive search marketing agreement with Google," said Yahoo in a statement.

"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."

In a related development, the Justice Department may be arming for an antitrust showdown with Google. On the same day that the ANA sent the aforementioned letter, The Wall Street Journal reported that the Department of Justice has secretly hired well-known litigator Sandy Litvack, former general counsel for Walt Disney.

The department had already indicated its interest in the deal when it confirmed that it was conducting a formal investigation in July. As part of the probe, the government had sent "civil investigative demands" to an array of Internet, advertising, and media companies that could be affected by the deal. (See: Yahoo, Microsoft look for other media partners; regulator investigates Yahoo-Google ad deal)

Journal writer John R Wilke states, "Litvack's hiring is the strongest signal yet that the US is preparing to take antitrust action against Google and its advertising deal with Yahoo Inc."

Google refused to comment on this reported hiring but asserted its intention to cooperate with the authorities.

"We voluntarily delayed implementation of this arrangement to give the Department of Justice time to understand it, and we continue to work cooperatively with them. While there has been a lot of speculation about this agreement's potential impact on advertisers or ad prices, we think it would be premature for regulators to halt the agreement before we implement it and everyone can judge the actual impact. We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the regulatory process," a Google spokesperson said.


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Advertisers opposes Yahoo-Google ad deal; authorities may take antitrust action