Advertisers protest Google-Yahoo search advertising deal

Companies who contribute $100 billion in advertising signal their fears of decreased competition if Google-Yahoo search deal is approved.

A trade group that represents large national advertisers like Ford Motor Co., Sara Lee, Wal-Mart and PepsiCo has sent a letter to the US Department of Justice objecting to a proposed Google-Yahoo search partnership.

The Association of National Advertisers - which represents 400 companies that spend more than US$100 billion a year in advertising - said yesterday that it sent the letter to Assistant Attorney General Thomas Barnett after what it called a comprehensive independent analysis of the deal, under which Yahoo would run advertising from Google alongside its search results.

In a post on the organization's Web site, ANA President and CEO Bob Liodice said the letter contends that "a Google-Yahoo partnership will control 90 percent of search advertising inventory" and expressed "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."

The US Justice Department is reviewing the four-year deal, which Yahoo has estimated will generate US$250 million to $450 million in operating cash flow during its first 12 months, and up to $800 million in the following years.

When contacted for comment on the ANA's objections, representatives from Yahoo and Google sent Computerworld the same list of URLs to news stories and Congressional testimony of advertisers and advertising agencies that have thrown their support behind the deal.

"Numerous advertisers have recognized that this agreement will help them better match their ads to users' interests, and that ad prices will continue to be set by competitive auction," noted Adam Kovacevich, Google's senior manager of global communication and public affairs, in a statement. "While some have raised questions about the agreement's potential impact on ad prices, advertisers care far more about getting a good return on their advertising dollar than they do about buying cheap ads that don't bring in customers. This agreement will clearly help advertisers reach Yahoo users more efficiently."

Yahoo added that it is disappointed in the ANA position. "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," Kovacevich's statement went on to note.

In a post on MarketingPilgrim, a blog site that focuses on Internet advertising, Andy Beal said that the sheer volume of advertising dollars spent by ANA members like American Express, Bank of America. American Airlines, Anheuser-Busch Companies, General Motors, Hasbro and Johnson & Johnson and might catch the eye of the DOJ regulators.

"If you were in charge of approving or denying Google's search ad deal with Yahoo, would US$100 billion influence your decision?" he wrote. "I'm not talking about a check with your name in the 'PAY TO' section, but a protest letter from a group of advertisers that, combined, control $100 billion in marketing spend. Would that make you think twice about giving your stamp of approval?"

"Google and Yahoo were prepared for some opposition to the deal-hence agreeing to give regulators 100 days to review the deal-but they probably weren't expecting such stout opposition," he added.

Paul Glazowski, a blogger at Mashable, went on to note that the ANA letter is the latest in a string of tough news for both Google and Yahoo.

"Google is now being hit with increased privacy concerns from European reaches, the US Government, consumer advocates, city and town residents, and various other parties, big and small," he noted.

And Yahoo has just fended off an attempt by Microsoft to purchase its business Glazowski added.

"Where will this go?" he wrote. "Perhaps not the way Google and Yahoo originally intended. The extra level of attention given by the ANA" can't be good news for the Ingternet firms. "Keep in mind, it is only weeks until the 'grace period' given to inspectors by Google and Yahoo is through."

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags google/yahoo search advertising deal

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Heather Havenstein

Show Comments



Victorinox Werks Professional Executive 17 Laptop Case

Learn more >



Back To Business Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?