Yahoo! and Google could together control 90 percent of ad market

The House Judiciary Committee Task Force on Competition Policy and Antitrust Laws met to discuss the potential effects of a Yahoo!-Google agreement on search advertising. Steven Chabot (R-Iowa) said that search engines must maintain competition to remain a neutral tool. The potential deal between the two Internet giants raised questions of a monopoly.

Michael Callahan, Executive Vice President and General Counsel for Yahoo!, said that the proposed agreement is not a merger. Yahoo! and Google’s nonexclusive deal assures that the two companies will increasingly compete and remain autonomous. He said the deal is good for advertisers as well as consumers. David Drummond, the Senior Vice President of Corporate Development and the Chief Legal Officer for Google, Inc. contended that the agreement would actually increase competition over search advertising. He said that the deal involves Yahoo! keeping its own search platform, but showing some Google ads. Tim Carter, the President and Chief Executive Officer of AsktheBuilder.com said that the deal will bring hundreds of millions in revenue to Yahoo!, thus making it more competitive with Google and keeping other companies on their toes.

Brad Smith, the Senior Vice President, General Counsel, and Corporate Secretary for Microsoft Corporation said the agreement would actually concentrate power over search advertising, with Yahoo! and Google together controlling 90 percent of the market, thus decreasing competition. He added that the deal would reduce options for advertisers, increase ad prices, and create online privacy implications. David Sable, Vice Chairman and Chief Operating Officer for Wunderman, said the agreement would create price-fixing and a non-competitive market. He said that the majority of people use different search engines and this element of choice must be maintained in the market to prevent a monopoly.