Newspaper Association Responds To Google, Yahoo Ad Deal
Yahoo Inc’s announcement of a deal with Google Inc’s ad service has many newspapers worried that it may result in less funding, the World Association of Newspapers, which represents 18,000 publications worldwide, said on Monday.
The association criticized the deal set to begin in October that will allow Google to sell ads that appear alongside Yahoo’s search results. Google and Yahoo will share the revenue from the clickable ads.
Together Google and Yahoo have a claim of more than 80 percent of the search market.
"Competition between both these two search companies has provided a necessary check to any potential market abuses, and has helped to ensure that publishers and content generators are capable of earning an equitable and fair return on their content," the group said in a statement.
"W.A.N. strenuously opposes Google’s attempt to take over a portion of Yahoo’s content advertising and syndicated search business," the newspaper group said.
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.
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."
W.A.N. also argued that "with respect to paid search ads, the deal can be perceived as an agreement to fix prices."
Google usually charges between 20 and 35 percent more than Yahoo on average, the group said, citing a study that found that "prices on Yahoo will increase by an average of 22 percent under the deal."
Although Google and Yahoo said the deal would only be in effect in the United States and Canada, the World Association of Newspapers said it would hurt Yahoo’s effort to compete vigorously against Google and give Google a valuable window into Yahoo’s ad business.
"The proposed deal will fatally weaken Yahoo as a competitor (to Google)," said the newspaper group, in calling on European antitrust authorities to scrutinize it.
Yahoo expects to boost its annual revenue by $800 million as a result of the deal.
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