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Consumer group asks senator to intervene in Google-Yahoo deal | News - Digital Media - CNET News

Tags: Google, AntiTrust on 2008-09-26 -All Annotations (5) -About

more fromnews.cnet.com

Google and Yahoo's controversial search advertising partnership deal took another hit Thursday, as consumer and public interest group Center for Digital Democracy fired off an opposition letter (PDF) to the chairman of the Senate antitrust committee.
Google announced Thursday that it has launched a Web site about its deal with Yahoo to serve as a FAQ.
Neither Google nor Yahoo! set ad prices. Ads are priced by an auction where an advertiser only bids what an ad is worth to them. And because of the wide variety of keywords and ads it is impossible for anyone to predict with certainty what might happen to prices for individual queries or even across the board. Furthermore, ad price is only one part of the story. A more important measure for advertisers large and small is the return on investment of their advertising dollar. The Google-Yahoo! agreement will help advertisers convert more clicks into customers by showing more relevant ads on Yahoo!, giving advertisers a better return for every dollar they invest.
Yahoo! has made clear that it will still use its own system to serve ads, and it will use extra revenue from this deal to improve its ad platform. The arrangement covers only the U.S. and Canada, and excludes the fast-growing mobile segment. Yahoo! also has an economic incentive to keep serving as many of its own ads as possible, since it gets to keep all of the revenue from those ads, while receiving only part of the revenue from ads served by Google.
This is exactly the opposite of our business goals in pursuing this agreement. The essence of our strategy is to 1) enhance the search user experience by showing the most relevant ads, and 2) show ads that deliver the most value to advertisers and to Yahoo! For example, the agreement allows us to provide
more valuable results to queries where we have no coverage or are under‐covered, and importantly to use the proceeds to develop products and services that scale and will strengthen our own marketplace.