ANA Asks Feds to Nix Google-Yahoo! Deal

The Association of National Advertisers on Sunday sent a letter to the Department of Justice asking that department nix a pact between Google and Yahoo! because it would lessen competition and raise prices for advertisers.

In a letter posted on the ANA site, Bob Liodice, the organization’s president, said that the “Google-Yahoo partnership will control 90% of search advertising inventory and 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.”

The letter also says that the protest was conceived following “a comprehensive, independent analysis, which included input from the Board’s members and face-to-face discussions with Google and Yahoo.”

In a statement, Yahoo addressed the letter: “We are disappointed with the ANA Board’s position regarding Yahoo!’s non-exclusive search marketing agreement with Google. Yahoo! remains steadfast in its belief that this deal-in which prices are determined by advertiser demand-driven auctions, and not by collaboration between Yahoo! and Google-will strengthen Yahoo!’s competitive position in online advertising and will help to drive a more robust, higher quality Yahoo! marketplace for our advertisers.”

Google and Yahoo announced in June that they would enter into an advertising partnership. If the deal goes through, Google would handle some queries on Yahoo! and match them with ads.

The move has also drawn criticism from a number of lawmakers, although they have no weight in the matter at this point.

Rep. John Conyers, a Michigan Democrat, said in July that he wanted to review the deal but the two companies did not trust him and members of his task force enough to let them see the signed search ad agreement unless they viewed it in a lawyer’s office, promised not to take notes and signed non-disclosure forms.

Other lawmakers have sent lists of questions to Yahoo, while others have voiced concern for data privacy.

In an Aug. 28 interview with Bloomberg television, Google CEO Eric Schmidt said the company would move ahead with the agreement will proceed with the agreement by early October.

“We are going to move forward,” Schmidt said in the interview. “We are in the process of talking to the government. They’ve not indicated one way or the other how they’re dealing with us.”