The online search advertising deal struck between Google and Yahoo! has raised plenty of eyebrows since its announcement and now the World Association of Newspapers (WAN) has announced that it strongly believes the deal will produce a negative impact for newspaper sites who seek ad revenue from Google and Yahoo! respectively. As a result, newspaper body WAN have now placed a formal complaint to the European and North American competition regulators opposing the deal, requesting that the deal is scrutinised.A deal between Google and Yahoo! was agreed in June 2008, in which Yahoo! would be able to use Google's advertising technology. However, it was anticipated all along that there would be complaints from competition regulators. Now there are claims that newspapers will have to pay more for paid search advertising, whilst Google will have the control to sell search and text ads on Yahoo's! website.
Additionally, it is believed the deal will only reduce the incentives for Yahoo! to compete against their rivals Google; but long term eventualities such as this are perhaps not an immediate consideration for Yahoo! who could generate up to £455m ($800m) in annual revenue from the deal.
WAN has an extensive portfolio, representing 77 national newspapers associations and 18,000 newspapers worldwide, with a large percentage of members active in North America . However, it'salso believed that European newspaper publishers will be effected by the deal. The competition between Google and Yahoo! has always been considered a healthy one, and one that ensured that WAN's members would still receive competitive returns for online advertising, not to mention competitive prices for purchasing paid search advertising.
It has been stated that Google and Yahoo! currently control over 95% of advertisers' search advertising spending in Europe, which confirms the power of the search engine giants, as well as the difficulty that is possibly ahead for newspaper sites. WAN are not the only major trade body to oppose the Google and Yahoo! alliance, with The Association of National Advertisers also recently publically opposing the deal as fears of a monopolisation grow.
With the deal currently under investigation by the US Department of Justice, all we can do is wait and see if the Mountain View giants will win another case or if the deal will continue to attract heat.
