The entire world is closely watching what is happening in terms of Yahoo-Google deal. Google though it has postponing all active moves until a conclusion is reached by the Department of Justice, it is trying to defend its position through its newly launched website on Yahoo-Google Facts. In the midst of anxious waiting the event are taking a new turn with some support from the U.S. House of Representatives.
An 11-member group of the U.S. House of Representatives has shown some positive interest in this hot debate whether the Department of Justice should allow or not allow the deal. They have appealed to the U.S. Department of Justice not to block the deal between Google and Yahoo.
A letter was sent to the Department of Justice making the above appeal by all the Democrats of California. In their letter, they have indicated that the Department of Justice has not so far blocked any deal that is of non-exclusive nature such as the Yahoo-Google deal. In their letter they have stated that the following, “”We are deeply concerned that the Department of Justice may be considering a preemptive lawsuit to block Yahoo’s nonexclusive online advertising agreement with Google….If such action were taken, we believe such an unprecedented would detrimentally affect the online advertising market and electronic commerce.”
Lately, there has been a heavy speculation, which anticipated that, the agreement between Yahoo and Google the two largest online advertising companies will be blocked by the Department of Justice. The opponents of the deal fear that if the deal goes through, it would put about 90% of the advertising market in the hands of two people, Google and Yahoo. Such a monopoly will affect the entire online advertising market fear the opponents.
The House of Judiciary Antitrust Task Force has asked the Department of Justice to make an in depth analysis of the Yahoo Google intended deal. According to the reports of the Judiciary, the deal will thwart all competition in the online advertising market. It will block all the new companies that try to enter this field as the deal between Yahoo and Google will form a massive clout, which cannot be overcome by the new entrants.
As a counter argument, the lawmakers who have appealed to the Department of Justice not to block the deal have stated that there is a total misunderstanding of the deal and the fear is absolutely unfounded. Google cannot have control over the 90% of the ad market as feared. Perhaps this could result if it is a merger instead of a non-exclusive deal, which is currently proposed between Yahoo and Google. This deal or agreement is of nonexclusive nature, which allows Yahoo to continue with its own search advertising system as the deal does not bar any of Yahoo’s current activities. Moreover, Yahoo has its own plans to revamp its advertising system to match Google’s competition. Such being the case, there cannot be any rational fear about the deal.
It is likely that the deal will be signed in October 2008 with or without the approval of Department of Justice. Approval of Department of Justice is not essential to make a valid deal.