Google, Yahoo Potential Deal Worries Heartland

The American Corn Growers Association asked John Conyers and Patrick Leahy to look closely at any potential search advertising tie-in with the top two search providers.

Without competition, the free enterprise system suffers. It’s true across all segments of industry, and that includes the business of agriculture.

The American Corn Growers Association represents part of that industry, one that our readers may not suspect has a stake in the gee-whizzy world of Internet technology. But any thriving industry knows it has to adapt and change to survive market conditions through the years.

An AGCA spokesperson told Murdok it’s no different for the family farmers out there, who have come to use search advertising as a way to mitigate risks associated with supplying customers and their businesses. Fewer providers, they fear, means higher prices.

AGCA submitted a letter to Senator Leahy and Representative Conyers, each chairmen of their respective Judiciary Committees in Congress. Here is the full text of the letter, endorsed by several farm industry organizations:

June 9, 2008

The Honorable Patrick Leahy
Chairman
U.S. Senate Committee on the Judiciary
224 Dirksen Senate Office Building
Washington, DC 20510

The Honorable John Conyers
Chairman
U.S. House Committee on the Judiciary
2138 Rayburn House Office Building
Washington, DC 20515

Dear Chairmen Leahy and Conyers:

We write to request that your respective Committees hold prompt hearings on the proposed partnership between Google and Yahoo! which threatens to create a monopolistic concentration of power in the market for online search and related advertising. This issue is of immense importance to rural communities that we represent.

As you know, search applications have become the primary portal for all Web users. Cattleman are now buying and selling calves on frontierstockyards.com, seed customers are finding suppliers through search ads displayed on AgriSeek.com, and family farmers are connecting with customers via localharvest.org.

Google currently has 70% share of the search advertising market and Yahoo! has 20%; any combined relationship – even if constructed as an “auction-outsourcing” arrangement intended to avoid antitrust scrutiny – will produce the same result: monopoly power over this critical link in the marketplace.

With that kind of control, a large monopolist can discriminate against small and middle-sized businesses from rural communities in favor of larger, more moneyed firms, driving up online advertising prices for everything from feedstock to equipment and shutting out hundreds of small businesses who need an open platform on which to market their products. Indeed, Google already has leveraged its considerable market power in search to enrich itself, entering into business lines such as email, mapping, healthcare information, and streaming video – all of which can be favored in Google’s own search results.

This is not an abstract fear for our members. Many rural communities are well aware of how large agri-businesses took over small farms and created economic havoc in its wake. We would hope and expect that our nation’s lawmakers would ensure that large Internet companies are not able to run roughshod over rural communities and businesses in the same way.

The House and Senate Judiciary Committees are at the forefront of ensuring that the marketplace – including the Internet marketplace – be free from abusive concentrations of power. We urge you to oversee this potential dangerous combination at your earliest possible convenience.

Sincerely,
Dennis Kuhlengel
President
National Association of Farmer Elected Committees

Larry Matlack
President
American Agriculture Movement

Keith Bolen
President
American Corn Growers Association

Rudy Arredondo
President/CEO
HOLA/National Latino Farmers & Ranchers Trade Association

Niel Ritchie
Executive Director
League of Rural Voters

Ben Burkett
President
National Family Farm Coalition

ACGA hopes to convince the Judiciary Committees to have a hearing on any potential Google and Yahoo search ad agreement, and ensure competition won’t suffer. A hearing with input from all sides of the issue should be of interest to search ad customers in and out of agriculture.