Shiny suits call monopoly shenanigans on GooHoo!

We! Ain't! Done! Nuffin!

By Chris Williams • Get more from this author

Posted in Law, 8th September 2008 09:49 GMT

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Fearing a Googley monopoly on web search, America's powerful Association of National Advertisers (ANA) has called on the Justice Department to nix Yahoo!'s plan to let its supposed rival run its text ads business.

The ANA said it discussed the deal face-to-face with Google and Yahoo! before deciding to call for a block on the partnership, which is scheduled to kick off next month.

The group lobbies for big-spending marketers at corporations such as Proctor and Gamble and General Motors. On Sunday it said it had written to anti-trust watchdogs to argue a partnership between Google and Yahoo! "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".

Google announced in June that it had agreed to pump Yahoo!'s pages with search ads and declared "we think it is good for users, advertisers and publishers". The deal is non-exclusive and leaves it up to Yahoo! to decide when to use Google's ad-placing platform rather than its own.

If regulators approve the tie-in, about 90 per cent of the search advertising market will be bound up by the pair. Microsoft, which had been trying to buy Yahoo!, was outraged, predictably decrying Google as a monopolist. Competition watchdogs are likely to take complaints from competitiors with a hefty pinch of salt, however.

The intervention of the ANA this weekend is more significant. Google's enormous and growing power over the online advertising business has until now seemingly dissuaded its customers from protesting.

In its statement responding to the ANA, Yahoo! said it believes relying on Google for making money sometimes will make it stronger. ®

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