Newspaper Opposition Emerges To Google-Yahoo AdWords Deal

Last week the Association of National Advertisers sent a letter on behalf of its 400 member companies to the US Justice Department (DOJ) asking the government to block the pending Google-Yahoo search advertising deal. Then there were reports that the DOJ had hired attorney Sandy Litvack, its chief antitrust attorney under former US President Jimmy Carter, as a consultant on the matter.

Today comes a communiqué from long-time Google critic the World Association of Newspapers (WAN) asking the DOJ, European Commission and equivalent Canadian authorities to prevent the deal from happening.

The WAN communiqué says:

[M]ost of W.A.N.’s 18,000 newspaper title members are, in fact, regular customers of Google (and to a lesser extent, Yahoo). These publishers depend on Google (and Yahoo) for a significant portion of their online advertising revenue and rely on each company’s respective search engines (both their paid search ads and their natural search results) to drive traffic to their websites . . .

[T]he proposed advertising deal between Google and Yahoo would seriously weaken that competition, resulting in less revenues and higher prices for our members. W.A.N. is also concerned that this deal would give Google unwarranted market power over important segments of online advertising.

The three major arguments are summarized as headings in the letter:

1. Less competition means less revenue 2. Less competition means higher costs 3. Less competition means even greater dependence on Google

Most of WAN’s members are in Europe and elsewhere around the world, but the organization does have US members. It’s also worth pointing out that Google and Yahoo both work extensively with newspapers — Yahoo in particular through its newspaper consortium.

Google and Yahoo have argued that there are no anti-trust implications here because it’s not a merger, doesn’t eliminate competition, increase Google’s market share or raise prices. However, putting aside the formal M&A point, Google’s critics are attacking the deal because they fear it will do precisely these things.