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Google/Yahoo Deal; Why Regulators Will Scrutinize Perception Not Just Implementation



It appears Google CEO Eric Schmidt is laying the foundation early to deflect any talk of an antitrust challenge, should it form a partnership with rival Yahoo.

When asked about the potential for an antitrust challenge Schmidt told the New York Times: “We would anticipate structuring a deal to address antitrust concerns.”

The big question isn’t really whether a deal between Yahoo and Google is anticompetitive. Nope, the real question is whether regulators are fearful that Google has become too dominant, when it comes to the search engine industry.

After all, if were merely a case of "is this specific deal anticompetitive" Google could point to similar deals in other industries. As the NYT notes…

The printer industry, they say, is a perfect example. Canon supplies printer engines to about 80 percent of the laser printer market, including its rival Hewlett-Packard. They point to many others, including Whirlpool’s making appliances for Sears, AT&T’s licensing its mobile network to Virgin Atlantic and other small carriers, Toyota’s selling hybrid engines to General Motors and Microsoft’s tailoring its Office software for Apple computers.

Viewed that way, an advertising partnership between Google and Yahoo is not a threat. Both companies retain their brand and ownership, with searchers free to make a choice as to which search engine to use.

However, there’s a lot of questions being raised about Google’s dominance. Questions that Microsoft is all too familiar with. The impact? Expect a Google/Yahoo deal to be scrutinized, not just on the actual implementation of the deal, but the perception of it too.

  • http://www.futurefactory-software.com Musashi

    The problem is not the search engine part but the advertising part. With only one serious market (Goohoo) for Adwords all advertisers have to use this market. So they are all competing for the same keywords on the same plattform pushing keyword-prizes to the sky.
    Thats the real threat and the real economic reason why they want to integrate.

  • http://www.roi-web.com Miki Dzugan

    Whether a Google/Yahoo deal is anti-competitive or not depends upon what the deal is. I can’t imagine that it would do Yahoo any good to close down their own ad service and serve nothing but Google ads.

    If, however, their agreement is to fill in with AdWords when the space is not filled from their own ad platform, it helps Yahoo to generate more income even while they work on improving their own PPC platform.

  • Francesca Romano

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