Posted April 28, 2008 4:27 pm by with 0 comments

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As Andy mentioned in today’s Pilgrim’s Picks, Reuters reports that Google’s confident about the proposed ad deal with Yahoo receiving the OK from the FTC.

If you don’t remember, almost three weeks ago, Yahoo announced that they would conduct a two week test of Google’s AdSense for Search program. A scant eight days later, Yahoo was reportedly very happy with the deal—and talking about making the arrangement permanent.

Reports surfaced late last week that the US Department of Justice was investigating the deal, which could possibly be a prelude to an FTC investigation.

An anonymous source, presumably someone inside or close to Google, told Reuters:

Google believes such a partnership would not be anti-competitive because it would be an arrangement in which Yahoo would use Google’s more profitable search advertising platform to make more money for itself.

Of course, taking advantage of someone else’s market domination to make more money wouldn’t be like creating an Internet advertising monopoly . . . oh, no, not at all. The source continued:

By contrast, Google thinks a takeover by Microsoft of Yahoo would raise far more antitrust concerns because the combined company could corner large chunks of multiple markets, from webmail to instant messaging.

Unlike large chunks of the search engine advertising market. You know, one that really makes money?

These are all pretty big words from someone who waited eight months for their last big deal to get approval.

Joking aside, some people with actual expertise in the area do say that the deal would likely be approved:

“The general rule would be that if the arrangement substantially limits competition in some aspect of their business, that would be problematic,” said Aaron Edlin, who teaches antitrust law at the University of California at Berkeley.

“Collaboration that comes short of merger is much more apt to pass muster before antitrust authorities,” he said.

Then again, I doubt that the DoJ and/or FTC are going to give the deal a rubber stamp just yet. After taking eight months to look at the DoubleClick deal, I think they’re being very careful about how much leeway they give the search engine giant.