In what is said to be a move towards protection against unfair trade practices, the US Association of National Advertisers has sent a letter to Thomas Barnett, Assistant Attorney General, US Department of Justice, opposing the Yahoo-Google search-advertising deal.
The Association of National Advertisers (ANA), a group of more than 400 companies with 9,000 brands that collectively spend over $100 billion in marketing communications and advertising, said that it conducted a comprehensive and independent analysis of its members and held in-person discussions with both companies before sending the letter to the antitrust division.
The ANA said: "The letter, authorized by the ANA board, notes that a Google-Yahoo partnership will control 90 percent of search advertising inventory and states ANA's 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 and advertising."
Microsoft's top lawyer has also previously warned that any deal between Yahoo and Google would hurt competition.
Microsoft’s General Counsel Brad Smith, said: "Any definitive agreement between Yahoo and Google would consolidate over 90 percent of the search-advertising market in Google's hands. This would make the market far less competitive, in contrast to our own proposal to acquire Yahoo."
Earlier, Microsoft had sought a tie-up with Yahoo for more than a year and by early May had offered up to $47.5 billion, or $33 per share, to buy the internet company. Microsoft had hoped a Yahoo deal would accelerate its ability to capitalize on Web advertising growth and compete with Google.
Yahoo said that Microsoft had made it clear in a meeting that it was no longer interested in buying the company outright, even at the price of $33 per share that Microsoft had proposed.
In June 2008, Google has agreed to provide Yahoo the ability to use Google's search and contextual advertising technology through its AdSense(TM) for Search and AdSense for Content advertising programs.
The deal, which has a term of up to ten years (a 4-year initial term and two 3-year renewals at Yahoo’s option), reportedly enhances Yahoo’s ability to realize its goal to grow operating cash flow significantly, while at the same time providing flexibility to continue to invest in ongoing initiatives such as algorithmic search innovation and search and display advertising platforms.
Under the agreement, Yahoo has the option to display Google ads alongside its own natural search results in the US and Canada. In addition, Yahoo can serve contextually targeted ads on its US and Canadian web properties as well as on its current publisher partner sites. Yahoo will continue to operate its own search engine, web properties and advertising services.
