Paul Sakuma/AP
Yahoo CEO Jerry Yang

Google and Yahoo Partner, Raising Antitrust Questions

June 13, 2008 05:41 PM
by Anne Szustek
The nonexclusive Yahoo–Google agreement went public yesterday after Yahoo ended talks with Microsoft. Shareholders and executives now await financial and legal developments.

30-Second Summary

After jilting Microsoft’s offer to take over Yahoo’s search function as well as buy a minority stake, Yahoo is now partnering with Google in a nonbinding deal worth up to $800 million in additional revenue for the second-ranked search engine.

According to Yahoo, the agreement, which entails running Google ads next to Yahoo’s original Web content and some search results, could rake in anywhere from $250 million to $450 million in its first 12 months.

The deal applies only to pages accessed from the United States and Canada.

The company’s projection jibes with CNET NewsBlog’s prediction that shareholders “probably shouldn’t expect a significant financial lift until 2009.”

Antitrust questions immediately surfaced. Wis. Sen. Herb Kohl, chair of the Senate Antitrust Subcommittee, said, “The consequences for advertisers and consumers could be far-reaching and warrant careful review.”

Omar Kordestani, Google’s senior vice president for global sales and business development, addressed antitrust concerns on Google’s blog: “Google and Yahoo will continue to be vigorous competitors, and that competition will help fuel innovation.”

The two companies are waiting three and a half months before proceeding to assuage any antitrust fears on the part of the Justice Department.

See BBC coverage

Headline Link: ‘Ad Accord for Yahoo and Google’

Background: Microsoft–Yahoo deal abandoned; Yahoo and Google explore partnership

Reaction: ‘Our Agreement to Provide Ad Technology to Yahoo’

Opinion & Analysis: Both parties plead for trust

Reference: FindingDulcinea’s Web Guide to Internet Marketing and Privacy

Related Topic: ‘Web-Browsing Cell Phones Have Marketers Seeking New Strategies’


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