The WSJ is reporting on a letter, sent from the Association of National Advertisers to the Department of Justice, cautioning against the proposed deal between Google and Yahoo. The ANA is citing the usual suspects when objections to mergers, acquisitions and partnerships. The letter is short, so Ill post the pertinent half.
The letter, authorized by the ANA Board, notes that a Google-Yahoo partnership will control 90 percent of search advertising inventory and states ANA’s concerns that the partnership will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising.
It is the last line that really rings true to the heart of the ANA’s issue with the deal. The ANA is worried that Google and Yahoo will be able to raise prices on the large percentage of online advertising inventory they control. It is a serious issue for the association, who represents institutional advertisers and who has a board made up of power brokers
ANA’s board, made up of well-known marketing executives including Brian Perkins, Johnson & Johnson‘s vice president of corporate affairs; Stephen Quinn, chief marketing officer at Wal-Mart Stores Inc; and Betsy Lazar, executive director of media and advertising for General Motors Corp., approved the group’s move. ~ WJS
I’m not a large Google or Yahoo advertiser and so I don’t have a good grasp on the merits of this raised objection. Clearly, when customers of a service speak out against something like this, especially one as well organized and connected as the ANA, the DOJ is likely to listen intently. In truth, there is the case to be made that Yahoo is threatened by the possibility of going out of business if this deal is not made. This would surely hurt competition and concentrate control within Google more than a partnership does. Microsoft has made similar arguments against the deal that the ANA is making. Those pleas have been largely ignored in the media as the cries of a competitor in the online ad market.