Yahoo Google Ad Deal

September 26th, 2008 at 12:00 am

yahoo google ad deal antitrust allegations

The Yahoo-Google deal that went down back in June where Yahoo basically outsourced some of their Ad business to Google after the failed Microhoo acquisition has been under scrutiny from the beginning.

Google competitors including Microsoft have been complaining that the Yahoo-Google partnership violates antitrust regulations and promotes unfair competition. Although that case has not yet been acted upon by the US government or any other government, Google is feeling the urge to explain itself to the public and its investors and probably the government that their deal is clean and within regulations of the antitrust laws in place.

And so Google has put up a minisite for everybody explaining what exactly is going on between them and Yahoo. The site answers frequently asked questions.

Here are some details about the deal.

Q: How will the Google-Yahoo! agreement affect ad prices?

A: Neither Google nor Yahoo! set ad prices. Ads are priced by an auction where an advertiser only bids what an ad is worth to them. And because of the wide variety of keywords and ads it is impossible for anyone to predict with certainty what might happen to prices for individual queries or even across the board.

Q: How will this agreement affect competition?

A: This agreement – unlike Microsoft’s proposed acquisition of Yahoo! – means that Yahoo! will remain an independent company in the business of search and advertising. Yahoo! has stated that it will reinvest the additional revenue from this agreement into improving its user services and competing vigorously against Google, Microsoft and other companies. This is similar to other standard business practices where competitors share components.

Q: Why are regulators investigating the deal?

A: Even though the companies were not required to receive regulatory approval of the arrangement before implementing it, Google and Yahoo! voluntarily agreed to delay implementation to give the U.S. Department of Justice and other regulators time to review the arrangement. Ultimately we believe that the efficiencies of this agreement will help preserve and enhance competition.

The complete FAQ’s are on the minisite and Google hope this will help them avoid the congressional hammer.