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ANA: GOOG/YHOO Deal Makes Tyrants of Two Ad Titans

'Leading the marketing

The Association of National Advertisers (ANA) sent a letter to anti-trust regulators in opposition to the sponsored search ad deal between Yahoo and Google.

ANA is a trade coalition that represents some of the largest advertisers in the United States, including P&G and General Motors. That it opposes the deal is no surprise; advertisers exhibited nervousness about the relationship as far back as June.

In his letter, President/CEO Bob Liodice of ANA wrote:

[The Google/Yahoo] 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 letter also claims the relationship would empower Google and Yahoo to control 90 percent of US search ad inventory.

Asst. Attorney General Thomas Barnett of the US Department of Justice received the letter, which is expected to fuel closer scrutiny of the relationship.

The non-exclusive deal enables Yahoo to serve sponsored search ads from both itself and Google. The distribution of ads supposedly depends on which generate the best click-through, meaning that most of the time, Google ads are expected to win.

Yahoo said the deal would generate $800 million in additional annual revenue — an easy target if, as some analysts suspect, the deal succeeds in increasing overall pay-per-click rates by about 22 percent.

In a statement responding to the letter, Yahoo expressed disappointment with the ANA's position. Asserting sponsored ad rates will be "determined by advertiser demand-driven auctions," the company argued the deal would only "strengthen Yahoo's competitive position in online advertising and […] drive a more robust, higher quality Yahoo marketplace for our advertisers."

The liaison does not require anti-trust clearance, but Google and Yahoo agreed to delay the program for 100 days while the Department of Justice reviews it.


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