Advertisers try to block Google-Yahoo! ad deal

A major advertisers' group has told US antitrust authorities that Yahoo!'s use of Google to supply some advertising will harm the advertising market. The US Association of National Advertisers (ANA) fears that the deal will limit choice and raise prices.

The Google-Yahoo! deal announced in June is the subject of an investigation by the US Department of Justice (DoJ) on competition grounds.

ANA chief executive Bob Liodice said that it had written to the DoJ objecting to the deal.

"The letter, authorized by the ANA Board, notes that a Google-Yahoo partnership will control 90 percent of search advertising inventory," said Liodice in a staement.

Yahoo! is one of Google's major competitors in the market for online advertising but announced earlier this year that it would allow Google to supply it with some search-related advertising content. The move was predicted to boost Yahoo!'s short term revenues but at the expense of handing greater market control to Google.

The ANA said that the deal would harm its members' ability to buy advertising cheaply from a range of suppliers.

"[The letter] states ANA's concerns that the partnership will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising," said Liodice's statement.

The ANA represents some of the world's biggest brands, including American Express, BMW, Coca-Cola, Ford and Microsoft.

The Yahoo!-Google deal is on adverts that are placed beside internet searches. Yahoo! has conceded that Google sometimes has ads available for search terms when Yahoo! does not, and the deal allows those to be used. It has also said, though, that it might use Google's ads even when it has some of its own available.

The DoJ is expected to rule shortly on whether it believes that the deal will harm competition in the market for online advertising.

Yahoo! has pointed out that the decision on which adverts to display is made by an advertiser auction system and not by any collaboration between Yahoo! and Google.

The deal has raised serious concerns among legislators as well as regulators. The Senate's antitrust subcommittee held a hearing in July on the deal investigating what it meant for the future of internet advertising.