Earnings Per Click

Yahoo, Google Closer To Big Ad Deal
David A. Utter | Staff Writer

Look for the complaints to fly into the DoJ's antitrust department
if Google and Yahoo broaden the scope of an advertising deal
placing Google ads in Yahoo's search results.

The two companies got in touch with Justice before starting a
brief trial of Google's AdSense for Search on Yahoo. Despite those
conversations, antitrust regulators still had some concerns about
the top two search sites teaming up on contextual advertising.

There may be more questions after today, and we're certain
Microsoft will shout suggestions from the sidelines. The Wall
Street Journal said Google and Yahoo could be close to placing
a new agreement on ads into effect.

They hope to avoid the sting of an antitrust investigation by
employing a new system, which would broaden the delivery of ads
to any network participating in it:

"The basis of such an arrangement would be a real-time auction
system that would choose the most lucrative ads for any given
consumer query from among those sold by Yahoo, Google and any of
their competitors, the people say. Microsoft, for example, could
potentially connect to the Yahoo system and have search ads it
sold displayed alongside Yahoo Web-search results, under an
arrangement where they likely would share ad revenue."

Plugging Google's ads into Yahoo may be worth over a billion
dollars a year in revenue to Yahoo, according to an analyst
cited by the Journal.

However, the potential deal may not be universally welcome
within Google's ranks, as the Journal cited some dissension
among Google's top brass. They fear the effects of a Justice
probe into the deal; Google has a global brand, one they do
not want to endanger.

The decision will fall to Google's ruling triumvirate of Eric
Schmidt, Larry Page, and Sergey Brin. If they truly feel their
solution will withstand Justice scrutiny, we expect it to
happen, closely followed by Microsoft making whatever legal
appeals it can to stop the deal.

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