Global Newspaper Group Pans Google/Yahoo Deal

  |  September 15, 2008   |  Comments

A statement from the World Association of Newspapers bluntly reveals the tension between Google and newspaper publishers.

If there are still questions about publishers' general distrust of Google, objections by a global newspaper association to the firm's ad deal with Yahoo should put them to rest. A "communiqué" published today regarding Google's search ad deal with Yahoo from the World Association of Newspapers bluntly reveals the tension between the search behemoth and newspaper publishers which are increasingly reliant on it for ad revenue and traffic.

Citing several examples of Google's "hostility" towards publishers, the missive suggests implementation of the planned "anti-competitive" partnership with Yahoo will weaken "the viability and economic independence of the world's newspapers."

While Google managed to receive approval for its DoubleClick acquisition from U.S. and E.U. regulators despite cries of industry monopolization, the search firm is again under fire as a result of its intended search ad relationship with Yahoo. In June, the search leaders agreed Yahoo will run ads purchased by some Google advertisers on Yahoo results pages in the U.S. and Canada, and may carry Google ads on non-search pages. At the time, both companies agreed to wait "up to three and a half months" for the U.S. Department of Justice to conclude its investigation of the deal. The DOJ review has yet to be finalized.

Like privacy advocates and advertiser groups that have bemoaned the partnership, the WAN contends the deal will limit competition, raise search ad prices, and solidify Google's domination of the online ad industry. Last week, the Association of National Advertisers suggested to the Justice Department 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."

Additionally, California Attorney General Jerry Brown's office is reportedly preparing for a possible investigation of the deal, and U.S. lawmakers also have expressed concern.

Not only is the WAN membership reliant upon the search companies for ad revenue as Yahoo Publisher Network and Google AdSense partners; they also buy ads from them to drive traffic to articles and other content on their sites. The WAN encompasses newspaper groups from Albania to Venezuela, including U.S.-based Newspaper Association of America. The NAA has no official position on the Google/Yahoo deal, according to a spokesperson.

"WAN believes that the competition that currently exists between Google and Yahoo is absolutely essential to ensuring that our member titles receive competitive returns for online advertising on their sites, and for obtaining competitive prices when they purchase paid search advertising," notes the WAN statement.

Yahoo stressed in a statement sent to ClickZ News that the deal will "help to drive a more robust, higher quality Yahoo marketplace for our advertisers and publishers." It continued, "Although WAN is primarily based in international markets not covered by our agreement with Google, we would be willing to engage in a meaningful dialog with its membership so that they fully understand this arrangement and the benefits it can provide to advertisers and publishers."

Google did not respond to a request for comment. However, CEO Eric Schmidt told Bloomberg Television in August the companies will set the deal in motion by early October as planned.

"I have not heard that much complaint about the cost of AdWords going up," said newspaper industry pundit Ken Doctor, in regards to U.S. newspaper publishers and their reactions to the anticipated partnership. Doctor, lead news analyst at media market research firm Outsell, suggested WAN publishers may be bitter towards Google because the two don't see eye-to-eye on a technology called Automated Content Access Protocol. ACAP is a rights-management system supported by publishers worldwide. If adopted by Google and other search engines, it would allow site publishers to block indexing of certain Web pages, essentially giving them more control over how much and what content can be displayed in search results. Reportedly, Google claims the ACAP system is not compatible with its platform.

Referencing ACAP, which was introduced by WAN and other groups, the WAN missive contends, "further solidification of Google's search and advertising market dominance, as will inevitably result from its deal with Yahoo, will be detrimental to all content creators and ultimately to the public." Among the concerns is that Google has failed to share much of its ad revenue with the publishers of the content that fuels that business.

"There is a clear connection there between Google's unwillingness to participate with publishers on ACAP and W.A.N.'s position on [the proposed deal]," said Doctor.

Though implementation of the deal could reduce ad revenue for some publishers, it may boost ad dollars for highly-trafficked paper sites, continued Doctor. "I would think that some big publishers are going to benefit from this. The ones that get significant AdSense revenue directly from Google could well be beneficiaries, but that is definitely a minority," he said.

Whether even large publishers will appreciate the planned partnership is debatable. "While newspapers rely on Google for a significant portion of their online advertising revenues," notes the WAN letter, "we rely even more on the robustness of Google's competitors to place constraints on its power."

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Kate Kaye

Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.

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