Google-Yahoo Ad Tie Up: Ad Trade Body ANA Opposes Deal; "Limits Choices"
This story was written by Rafat Ali.
The Association of National Advertisers, which represents big ticket consumers advertisers such as Procter & Gamble, General Motors, Apple (NSDQ: AAPL) and others, has sent a letter to the Department of Justice opposing the recent Google-Yahoo (NSDQ: YHOO) search advertising pact. In the letter, posted on its site, Bob Liodice, President and CEO, ANA, mentioned the organization's opposition to the deal. It says that ANA came to its conclusions after "a comprehensive, independent analysis, which included input from the Board's members and face-to-face discussions with Google and Yahoo".
It further states that " Google-Yahoo partnership will control 90 percent of search advertising inventory and states ANA's concerns 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." There may be more to the letter (which it did not disclose fully) and its investigation, but the two aren't combining all their inventory; Google will only have access to limited inventory from Yahoo against which to serve up its contextual ads.
The Justice Department and several state attorneys general are still examining the partnership between Yahoo and Google (NSDQ: GOOG). The two companies had voluntarily delayed implementation of this deal for 100 days until regulators clear up the review, though they have said they are not required to wait for the regulatory approval.
WSJ: "Whether the letter will influence federal antitrust regulators remains unclear, but it is considered a blow to Yahoo and Google because of the trade group's high profile. Until now, big marketers have been reluctant to come out against the deal publicly because of Google's growing power in the ad business."
Meanwhile, both Yahoo and Google have reacted late today on this letter. Yahoo: The "prices are determined by advertiser demand-driven auctions, not by collaboration between Yahoo and Google...will help to drive a more robust, higher quality...marketplace for our advertisers". From Google: "While some have raised questions about the agreements' potential impact on ad prices, advertisers care far more about getting a good return on their advertising dollar than they do about buying cheap ads that don't bring in customers, and this agreement will clearly help advertisers reach Yahoo users more efficiently."
By Rafat Ali