Google and Yahoo! to press ahead with controversial ad deal

12 Sep 2008

Global internet powerhouses Google and Yahoo! are pressing ahead with a much-criticised search ad deal, regardless of potential anti-trust issues.

From October, Google will sell ads alongside Yahoo! search results on certain pages.

Both companies agreed in June that the US Department of Justice will be able to examine the plan for anti-trust issues and agreed to wait almost four months to give time for regulators to scrutinise the ad platform.

However, it is now understood that the companies intend to run the ads even if the plan is not cleared by regulators.

According to reports, Google chief executive, Eric Schmidt, has stressed that both companies volunteered the platform to regulatory scrutiny and they are confident they Department of Justice will grant its assent.

Microsoft, which earlier this year launched a failed bid to acquire Yahoo! for US$47.5bn has warned the partnership would only end up reducing competition in the online ads market.

The US Association of National Advertisers, as well as a number of states have also asked the Department of Justice to block the deal.

The deal is tipped to boost Yahoo!’s annual revenue by US$800m.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years