Yahoo! and Google Unveil Excerpts of Controversial Ad Agreement
Last Friday, Yahoo! released sections of their controversial ad agreement with Google to the public. The agreement was part of Yahoo!’s quarterly financial statement which was filed with the Securities and Exchange Commission.
Several pages of the agreement have been redacted, including sections of how the deal between the two Internet companies will work. They’ve also left out details about the revenue split and other financial facts.
Under the contract, Google would provide Yahoo! with advertising offerings that will coincide with Yahoo’s web search system. Also, there are plans to merge Yahoo! and Google’s instant messaging (IM) programs into one program.
Yahoo!’s agreement with Google is under a formal review by the U.S. Department of Justice, which is investigating whether or not the deal is a violation of antitrust laws. Congress has held meetings to discuss the Yahoo!-Google deal, even though they have no authority over this matter. According to press reports, Attorney Generals from Connecticut, Florida, and Arkansas are also examining the deal.
Microsoft has spoken out against the Yahoo!-Google agreement claiming that the deal is “anticompetitive” because essentially, two of the three biggest companies in the online search marketing industry are joining forces. “Google already controls 70 percent of the Web search ad market and a Yahoo! deal would give Google control of over 90 percent of the market,” states press reports. Google has fired back stating that the two companies will compete in other areas of the market.
Yahoo! has previously stated that they expect to generate a whopping $450 million in cash flow within the first year of this advertising contract. They have also stated that this deal will give them the opportunity to focus on other aspects of their company.
Whether or not this Yahoo!-Google deal will be enacted remains to be seen. The two companies are currently in a waiting period, but with all the controversy surrounding it, it may never take effect.
Spokespersons for both Yahoo! and Google have not released an official statement about the release nor the redactions.
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