Yahoo, Google Ad Deal Set to Begin In October
Posted on: Friday, 12 September 2008, 13:05 CDT
Yahoo backed up its plan to partner with Google’s ad service despite public concern that the agreement may breach anti-trust regulations.
Beginning in October, Google will sell ads that appear alongside Yahoo’s search results.
Hilary Schneider, executive vice-president of Yahoo US, said the agreement was "fully within the guidelines of the law".
Both companies voluntarily agreed to have the US Department of Justice (DoJ) examine the plan, which was announced in June.
Some speculated that US justice department would respond after it hired a veteran anti-trust lawyer this week.
Now Yahoo has said even if the plan is not cleared by regulators, it will go ahead as planned.
"We are confident the agreement makes sense. We are committed to moving ahead," said Ms Schneider.
"Remember this is a voluntary process we engaged in and we think it's really working in terms of helping the Department of Justice understand the issues."
"We went to them (the DoJ) pro-actively and said 'let's go through a review',” said Yahoo co-founder David Filo. “We have done that and we are confident that all parties will agree this is good for competition in the long term. And so we are expecting them to agree with that."
Microsoft, with the memory of its failed bid to takeover Yahoo for $47.5 billion earlier this year, voiced concerns that the deal would reduce competition in the search advertising market.
Combined, Yahoo and Google control more than 80% of the US search advertising market.
Yahoo expects to boost its annual revenue by $800 million (£455m) as a result of the deal.
It is seen as key to turning the company around, after share prices plummeted to a five-year low of $17.85, well below the $33 a share offered by Microsoft.
"It cuts across everything we are doing," said Mr Filo of moves to invite third party developers "to develop on top of our stuff, to be innovative and drive the market".
"It is pretty vital to our future success. I mean without it we are just not going to have the richness of products and services you will see if we don't open up."
Yahoo’s homepage will also be revamped for the first time since 2006 to allow users more ease in adding third party services or widgets.
The company also plans to open up its music section to rival services like Apple's iTunes and Amazon in the new few weeks. And the news section will also start to feature more local content.
"Open is literally the way we are going to unlock a lot of the value of Yahoo's assets and allow developers from across the web to build on Yahoo as well as take parts of Yahoo out,” said Ari Balogh, Yahoo’s chief technology officer.
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Source: redOrbit Staff & Wire Reports
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