Marketers Formally Object to Yahoo-Google Pact

  |  September 8, 2008   |  Comments

ANA pens letter to DOJ, asserting outsourcing deal will reduce choice and raise prices for advertisers.

In a plea to the U.S. Department of Justice, the Association of National Advertisers has voiced its opposition to Yahoo's plan to outsource some search ads to rival Google.

The group, which represents the interests of approximately 400 major advertisers, said it has conducted an analysis of the looming tie-up between Google and Yahoo. Its conclusion, based on interviews with members, its board, Google and Yahoo: The deal is rotten for marketers.

"...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 association said in a statement about the letter.

The ANA letter was addressed to Thomas Barnett, assistant attorney general, U.S. Department of Justice. The group declined to provide a copy of the letter and neither the ANA or Department of Justice were immediately available to comment.

Barring intervention by the DoJ, Yahoo and Google will flip the switch in October. When the companies paired up in June, they said they'd delay implementation for up to three and a half months to allow a U.S. Justice Department review, though such a postponement isn't required by law.

"We are going to move forward," Google CEO Eric Schmidt told the Seattle Times late last month. "We are in the process of talking to the government. They've not indicated one way or the other how they're dealing with us."

While the DoJ may be mum on the pact, others in government have expressed concern. In a July 15 hearing, a Senate Judiciary Committee wondered if the companies' relationship would remove an important check on Google's dominance of the search ads marketplace.

Yahoo and Google have all but admitted the deal would raise prices for advertisers, though they haven't used those words exactly. In the words of Yahoo President Sue Decker, carrying Google's ads will help the company "deliver financial value to stockholders from search monetization." Advertisers have pointed out better monetization in this case means pricier keywords; they expect Yahoo will switch out its own relatively cheap ads when Google can sell a given search keyword or phrase at a premium.

The question is, are higher prices enough to make the DoJ act? Yahoo has been under pressure to improve performance, especially in the wake of its damaging merger negotiations with Microsoft. The matter may boil down to whether regulators decide Yahoo's continued health is more important than keeping costs low for Internet advertisers.

Google's Schmidt appears unconcerned: "We always worry a little bit, but we think our arguments are pretty strong," he told the Seattle Times in August.

ClickZ Live New York What's New for 2015?
You spoke, we listened! ClickZ Live New York (Mar 30-Apr 1) is back with a brand new streamlined agenda. Don't miss the latest digital marketing tips, tricks and tools that will make you re-think your strategy and revolutionize your marketing campaigns. Super Saver Rates are available now. Register today!

ABOUT THE AUTHOR

Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

5 Ways to Personalize Beyond the Subject Line

5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.

WEBINARS

Resources

Jobs

    • Customer Service Consultant
      Customer Service Consultant (Bonner and Partners) - Delray BeachBonner & Partners: Full-time Customer Service Consultant Position Who we are...
    • Financial Editor
      Financial Editor (Confidential) - DurhamSIX FIGURE EDITORS WANTED: To enforce lofty NEW editing standards. Easy Conditions Unlikely. Promotion and...
    • Information Processing Specialist
      Information Processing Specialist (Agora Inc. ) - BaltimoreInformation Processing Specialist – The IP specialist position ensures the successful...