DoJ investigates Yahoo Google deal

Antitrust concerns spark enquiry

Ian Williams, vnunet.com 03 Jul 2008

The US Department of Justice has launched an antitrust investigation into the advertising deal announced by Yahoo and Google in June.

The non-exclusive agreement lets Yahoo use Google's AdSense for Search and AdSense for Content advertising programmes, effectively allowing Yahoo the option of displaying Google ads alongside its own search results.

Both companies have now agreed to give antitrust authorities three months to look at the deal before going ahead.

Reports suggest that the investigators are also planning to review documents from other online media firms.

Google and Yahoo dominate the search arena, holding around 80 per cent of the market between them.

The two companies are not merging, and the deal is not exclusive for either party, so the partnership does not need upfront approval from the authorities.

However, if the deal is considered anti-competitive it could be stopped or modified to ensure fairness.

The launch of a formal investigation suggests that the DoJ may have found some cause for concern.

Martin Warner, co-founder of Technology of Tomorrow 2008, said: "This is the same as the Microsoft browser issue. Google advertising accounts for 55 per cent of all advertising expenditure in the US.

"A deal with Yahoo will give them a massive monopoly, not just in the US but in the global market."

Warner added that the ramifications of this are "huge for a variety of stakeholders" particularly the advertisers themselves.

The deal could also fundamentally affect the way users access information online, and how new services evolve on the internet, as it will entail a huge manipulation of the market, he said.

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