If the proposed Google Yahoo! alliance does pass the scrutiny of the Department of Justice and is launched, how will that affect advertisers?В
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The primary concern of advertisers is price.В Google could essentially have a search ad monopoly and thus the ability to raise prices or fees at will.В Advertisers would not have any choice but to comply because a Google boycott would be the equivalent business suicide.В A coalition of 16 civil rights and rural advocacy bodies recently wrote to the DOJ that the Google Yahoo! partnership could result in “a possible future in which no content could be seamlessly accessed without Google’s permission.” There are some estimates that under the Google Yahoo! deal,В ads on Yahoo! could increase in cost by up to 22 percent.В
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Another issue amongst advertisers that might have greater long-term effects is that a Google Yahoo! partnership might stifle technological innovation.В A partnership could reduce incentive on both sides, as Yahoo! would gain financial stability (some estimates are a high asВ $1 billion per year) and Google would expand its dominance of the Internet advertising market.В
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Google, Yahoo!, and Microsoft were recently subpoenaed and the DOJ is set to launch a formal antitrust investigation. Former DOJ antitrust attorney Peter Guryan said that while the information demands do not mean that the DOJ has drawn conclusions, they do signal that, “the DOJ clearly has questions.”
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