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This is an archive article published on September 16, 2008

145;Google, Yahoo tie hurts competition146;

A deal by Google Inc and Yahoo Inc to share some advertising revenue will mean less money for newspapers.

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A deal by Google Inc and Yahoo Inc to share some advertising revenue will mean less money for newspapers and weaken Yahoo in the long run, the World Association of Newspapers said on Monday.

The group, which represents 18,000 publications worldwide, criticized a deal struck in June in which Google will supply Yahoo with advertising services to run alongside Yahoo8217;s own Web search system. Together the two companies have more than 80 per cent of the search market.

8220;Competition between both these two search companies has provided a necessary check to any potential market abuses, and has helped to ensure that publishers and content generators are capable of earning an equitable and fair return on their content,8221; the group said in a statement.

8220;W.A.N. strenuously opposes Google8217;s attempt to take over a portion of Yahoo8217;s content advertising and syndicated search business,8221; the newspaper group said.

The newspaper association expressed concern the deal was announced as publishers battled Google over copyright issues.

The group also argued that 8220;with respect to paid search ads, the deal can be perceived as an agreement to fix prices.8221;

Google usually charges between 20 and 35 per cent more than Yahoo on average, the group said, citing a study that found that 8220;prices on Yahoo will increase by an average of 22 per cent under the deal.8221;

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Although Google and Yahoo said the deal would only be in effect in the United States and Canada, the World Association of Newspapers said it would hurt Yahoo8217;s effort to compete vigorously against Google and give Google a valuable window into Yahoo8217;s ad business.

8220;The proposed deal will fatally weaken Yahoo as a competitor to Google,8221; said the newspaper group, in calling on European antitrust authorities to scrutinize it.

 

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