Category: Google

Google has created a new website, yahoogooglefacts.com (which redirects to http://www.google.com/yahoogooglefacts/), to provide information about the planned Google-Yahoo search advertising partnership. In a post on the Google Public Policy Blog, Google said the website is intended “to provide more information on the agreement and why it is good for consumers, advertisers and website publishers.” The site includes a slide show about the partnership, answers to various question about the deal, quotes from supporters of the partnership, and a video of Google’s Chief Legal Officer David Drummond testimony before the U.S. Senate Judiciary Committee. Google has recently step up its effort to publicly defend the partnership, including challenging a report that the partnership would mean higher prices for advertisers.

In a post on the Google Public Policy Blog, Google’s Chief Economist Hal Varian challenged the findings of a report by SearchIgnite that Google-Yahoo search advertising partnership would cost advertisers more. Varian say that the report is flawed because only looks at the cost of clicks and not the performance of those clicks. He says that “we believe that advertisers will be getting significantly better performance at prices that reflect that improved performance” He goes on to say that neither Yahoo! or Google will be able to see the current auction prices, so Yahoo! no the have the ability to choose the ads with the higher price. He also said that because Yahoo! receives all the revenue for their own ads and only part of the revenue from Google ads, Yahoo! has a strong economic interest to serve their own ads. Finally, he claims that advertisers receive a higher return on investment for clicks on Google ads because they are “highly relevant to user queries” and that “we anticipate that our agreement with Yahoo! will bring more relevant ads to Yahoo! users” which would increase the return on investment.

The European Union opened a review into the Google-Yahoo search advertising partnership in July, according to Los Angeles Times article. The planned partnership is only in the United States and Canada, but Jonathan Todd, a spokesman for the European Union’s competition commission, told the Times that “since the two companies do business in Europe, the cooperation could violate European Commission rules on anti-competitive practices, such as price-fixing and sharing of sensitive business information.” Todd also said that the review “would focus on the possible effects of the deal on European Commission rules relating to restrictive business practices.” Last week the U.S. Justice Department hired lawyer Sanford Litvack in preparation for a possible challenge to the partnership.

In an interview with Bloomberg Google CEO Eric Schmidt said that Google search advertising partnership with Yahoo! is preceding to start in early October. He also said that regulators have so far “not indicated one way or the other how they’re dealing with us.” The partnership is currently under review by U.S. state and federal regulators, as well as Canadian regulators.