Chuck Aikens

Google has already faced quite a bit of examination for their proposed advertising partnership with Yahoo and now they are on the receiving end of a little more. During separate House and Senate hearings on Internet competition recently Capitol Hill turned their attention to the potential deal.

Executives from Google, Yahoo and Microsoft were all questioned by lawmakers about the impact consumers and advertisers would face from the deals. An announcement made by Google last month about providing search advertising for Yahoo is what brought about the hearings.

A main concern is that Yahoo will be reduced to “a satellite in the Google orbit” should the deal go through. And the Justice Department is investigating whether a Google and Yahoo deal would create a monopoly.
Google and Yahoo defend their deal as a way to deliver more relevant ads to consumers and more valuable leads to advertisers.

Google and Yahoo defended the partnership as a way to deliver more relevant ads to consumers and more valuable leads to advertisers. And David Drummond, Google’s general counselor, stated that Yahoo would still be selling its own ads which means that deal wouldn’t lead to Google having ultimate control in the search ad market.

Under the deal, Google would provide search advertising to run with some Yahoo searches in the United States and Canada. Yahoo is estimated to receive as much as $800 million annually from the deal.

Microsoft argues that allowing the two biggest players in search advertising to combine efforts would give Google control of 90 percent of the market and allow it to raise prices and have unprecedented access to information about consumers’ online habits.