Antitrust regulators will take a closer look at the potential implications of an advertising deal made by Google and Yahoo last month.
Off and on over the past few years, it had been suggested the best thing Yahoo could do for its search advertising business would be to give it to Google. The money-printing AdWords machine offered the promise of a much greater return on contextual search advertising than what Yahoo made from its in-house business.
Yahoo demurred for some time, focusing energies on developing and testing an updated search ad system dubbed Panama. Rolling it out would put an end to the Google chatter, as the developers worked to make the system more attentive to relevancy in ad selection.
Unfortunately it didn’t make enough money fast enough, and Yahoo found itself the target of an unsolicited bid from Microsoft to take over the company. The proceedings dragged on for months; Microsoft walked away, then came back with an offer for Yahoo’s search business.
Yahoo wanted no part of that deal, and turned to Google instead, to expand what had been a limited test of Google’s AdSense running in Yahoo’s search results. Expanding that partnership would mean hundreds of millions to Yahoo, and CEO Jerry Yang announced the two one-time search rivals would do just that.
Now the Washington Post says the antitrust concerns the two companies dismissed as not applying to their deal indeed have some application, at least in the eyes of DoJ. Yahoo said in the report the review was “nothing unexpected,” though we have to think they preferred not to have a formal investigation take place.
Attorneys cited by the Post indicated such a probe meant significant antitrust questions exist, and Google and Yahoo will have to answer them. Some feel Google will end up with a virtual monopoly on search advertising if the deal passes muster, something the company denies.
Yahoo will have to convince investigators of this, but they’ll have plenty of opponents who remain unconvinced that Google’s best of breed search advertising won’t turn the search ad market into an uncompetitive one-stop shop.
