The controversy over the ad partnership between Google and Yahoo continues to rage. Google CEO Eric Schmidt says “”I am quite sure that Microsoft is helping everyone get upset about things,” and adds that Google is “playing by the rules.”
Other major players don’t seem convinced. The World federation of Newspapers has joined the anti Google-hoo team, stating the partnership “will have a detrimental effect on competition” and “result in price increases.” They went on to add, “Although Google and Yahoo insist this agreement is limited to North America, WFA believes that the effects will be global” and the “substantial benefits for both parties in the US and Canada will almost certainly reduce their incentive to compete in other markets as they do today.”
The WFA has written to the European Commission’s Directorate-General for Competition. The World Association of Newspapers has called upon the European Commission and the Competition Bureau of Canada to block the deal as well.
A host of others, large and small, are closing ranks and pleading with the DOJ to block the move, but Google and Yahoo seem unconcerned, and have reiterated their plans to move forward with the deal in October. “We anticipated these objections,” said Schmidt. “This is roughly where we expected to be.”
Tim Armstrong of the Google Public Policy Blog says that the deal is not bad for competition, comparing the deal to Toyota providing hybrid technology to competitor General Motors. Yahoo isn’t giving their market share to Google, it is rather a mutually beneficial agreement buy which Yahoo will have extra ads to fill their empty spaces, and they can profit from Google’s massive advertising base.
“They have stated that their plan is [to] show them primarily on pages where few or no ads currently appear,” said Armstrong. “The only way for an advertiser to guarantee placement for their ads on Yahoo! is to advertise through the Yahoo! platform itself. It’s about expanding the pie, not dividing it differently.”
Tags: advertising, DOJ, WAN, WFA