Google and Yahoo searching for support

The Google-Yahoo! agreement and the future of advertising on the Internet was discussed by the Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights. After tapping elbows with Sen. Arlen Specter (R-Pa.), Yahoo! and Google representatives defended an agreement in which Yahoo! would outsource advertising space to Google, an agreement that was met with support and anxiety.

General Counsel for Yahoo! Michael Callahan and David Drummond, Google’s chief legal officer, explained the agreement between the two companies. Both stated that Yahoo! will not exit the online search business and that the agreement will allow web-based advertising to become a more competitive business. In response to concerns that consumers will only purchase advertisements through Google in anticipation that they will also appear on Yahoo!, Drummond and Callahan said Yahoo! will determine when Google ads will appear on Yahoo! and that consumers will need to buy advertising space on Google and Yahoo! to guarantee exposure on both websites,

Senior Vice President at Microsoft Brad Smith explained his opposition to the agreement between Google and Yahoo! Smith said that the agreement would result in an unprecedented concentration of control in a market, stating that combined, Google and Yahoo! control 90 percent of the online search market. Smith added that Yahoo! CEO Jerry Yang told Microsoft that an agreement between Yahoo! and Google would remove Microsoft as a competitor, a move Smith called a monopoly.

Tim Carter, CEO of askthebuilder.com, told the subcommittee it would be un-American to prevent a company from helping its stockholders. Carter said Google’s ability to provide Americans with reliable results has brought Google a 70 percent share of the online search market and that Congress should not punish a company for performing well.