Although Google and Yahoo claim that their partnership is like peanut butter and jelly, some major players are less than pleased.
The Association of National Advertisers has written a letter to the Department of Justice expressing their concern over the two search engines teaming up, citing worries that the advertising prices could be gamed if the two are no longer competitive. The ANA revealed the content of the letter:
The ANA has sent a letter to Thomas O. Barnett, Assistant Attorney General, U.S. Department of Justice (DOJ), citing its objections to the announced Google-Yahoo search advertising partnership now under review by the DOJ. In preparing this letter, ANA conducted a comprehensive, independent analysis, which included input from the Board’s members and face-to-face discussions with Google and Yahoo.
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 advertising.
The ANA boasts such big names as Walt Disney, Proctor and Gamble, and Johnson and Johnson. Their fears are backed by a $1 billion budget, making them a force to be reckoned with, and they have convinced the Department of Justice to probe more deeply into the matter.
At least, we assume that is what is happening, as only a few days after the ANA’s letter comes the news that the DOJ has indeed hired a lawyer – and how coincidental; it’s Sandy Litvac, former antitrust chief, and more recently, former Disney vice chairman.
Is it Google / Yahoo we should be worried about, or DOJ / Disney?
Google stated a few weeks ago that they intended at this point to move forward in October, stating they did not expect any hold up from the Department of Justice. Kent Walker, general counsel for Google, even stated that “In fact, there’s no requirement we get regulatory approval in the U.S.; we have entered into discussions with the U.S. Department of Justice, though,” and added that “we don’t see a need for regulatory approval in Europe.”
Brits seem just as worried about the pending monopoly as Americans, however, as Warren Cowan CEO of Greenlight stated. “It goes in the opposite direction of what marketers want. It means more consolidation with one large partner. If a marketer wants to diversify their risk and spread their risk across multiple channels, that will be harder to do.” Greenlight is itself a large British search marketing firm.