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Big advertisers protest Google-Yahoo search deal

By Heather Havenstein
September 15, 2008 12:00 PM ET

Computerworld - The Association of National Advertisers has called on the U.S. Department of Justice to reject a planned joint search advertising program by Google Inc. and Yahoo Inc.

The New York-based trade group -- which represents 400 companies that spend more than $100 billion annually on advertising -- said "a Google-Yahoo partnership would control 90% of national search advertising inventory."

Under the proposed four-year deal announced in June, advertisers would pay Google for ads that appear with Yahoo search results, and then Google would pay a portion of the proceeds to Yahoo. Yahoo estimated that the deal would generate $250 million to $450 million during its first 12 months, and up to $800 million annually thereafter.

In a note posted on the ANA Web site, President and CEO Bob Liodice said his group is concerned "that the partnership will likely diminish competition, increase concentration of market power, limit choices and potentially raise prices for high quality, affordable" search ads.

Although Yahoo and Google contended that the deal doesn't need regulatory approval, they did agree to delay its implementation for three and a half months after the June 12 announcement so the Justice Department could review its terms.

Internet marketing consultant Andy Beal, said in a blog post that Google and Yahoo are likely surprised at the advertising group's opposition to the deal. The clout of the ANA membership could easily affect the DOJ's decision, he noted.

"Google and Yahoo were prepared for some opposition to the deal -- hence agreeing to give regulators 100 days to review the deal -- but they probably weren't expecting such stout opposition," Beal said.

Both Yahoo and Google directed reporters to Web sites containing news stories with information on advertisers that support the deal.

This version of the story originally appeared in Computerworld's print edition.

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