Advertiser group objects to Google-Yahoo tie up

Fairfax Media

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The US Association of National Advertisers has sent a letter objecting to the proposed internet search advertising partnership between Yahoo and Google to US government regulators reviewing the deal.

The letter to Assistant Attorney General Thomas Barnett, noted that "a Google-Yahoo partnership will control 90 percent of search advertising inventory," the ANA said in a statement.

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 statement said.

Barnett could not be reached for comment on Sunday.

Yahoo "remains steadfast in its belief that this deal – in which prices are determined by advertiser demand-driven auctions, not by collaboration between Yahoo and Google – will strengthen Yahoo's competitive position. . . and will help to drive a more robust, higher quality. . . marketplace for our advertisers," the company said in a statement on Sunday.

Some advertisers have lauded the deal, which some have described as providing a more efficient online ad marketplace.

Yahoo struck the agreement in June with Google, the world's dominant supplier of Web search services, as it sought to shore up its advertising business and ward off pressure to merge from Microsoft.

The two companies said at the time that they were not required to get regulatory approval before implementing the deal, but had voluntarily delayed it for up to three-and-a-half months while anti-trust regulators review the arrangement.

The nonexclusive deal covers the United States and Canada but not other markets.

Under the deal, Google would supply Yahoo with advertising services to run alongside Yahoo's own Web search system. Yahoo runs the Web's second most popular search service.

Google and Yahoo executives have defended the agreement, saying they will compete aggressively in other areas.

Google could not be immediately reached for comment. Google has said it expects to carry out the Yahoo deal next month.

Several states attorneys general also are reviewing the proposed pact, including Florida Attorney General Bill McCollum, whose spokeswoman had no comment on the ANA's statement.

"It's hard to determine when (the Florida review) will be complete," McCollum's spokeswoman Sandi Copes said.

- Reuters