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Hard Looks in Yahoo-Google Ad Deal
By xaby | June 20, 2008
With Google and Yahoo ad deal on hold, regulators will be asking the industry how much competition matters in search.
Many financial analysts have greeted Yahoo’s ad deal with Google as the first real sign of life to come from the beleaguered Web pioneer since it spurned Microsoft’s takeover bid.
In Washington, however, government regulators and lawmakers are expected to take a hard look at the anticompetitive implications of the partnership.
On paper, it looks great. In a side-by-side comparison, Google (NASDAQ: GOOG) makes a lot more money than Yahoo (NASDAQ: YHOO) placing an ad next to a page of search results, so pairing Google’s ads next to some of its search results seems a good way for Yahoo to boost revenue at a time when it’s desperate to prove to shareholders that it can make it as an independent company. “Free money,” quipped former Ask.com CEO Jim Lanzone.
The strategic upsides for Yahoo — and certainly Google — are easy enough to see. But beyond the short-term value the deal might deliver, there is a real concern that as the partnership develops, Yahoo will gradually cede more of its search advertising to Google, effectively nullifying what competition there is in the market today.
Full Story at InternetNews.com
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