Yahoo Further Explains Tie-up With Google

On the heels of Wednesday's news that California was joining other states in scrutinizing the anti-trust implications of the recent Yahoo (YHOO) - Google (GOOG) ad partnership, Yahoo executive president Hilary Schneider Thursday morning explained how the tie-up will benefit users -- without explicitly acknowledging the potential legal problems of the deal.

(Disclosure: Schneider was formerly CEO of Red Herring where I worked "back in the day.")

Addressing the press corps during a media briefing, Schneider began, "Let's talk a little bit about Google." She provided a bit of background on the arrangement, summarizing it as "Allowing Google to sell against our audience where it makes sense for Yahoo."

Taking the example of search query: "red roses in Birmingham Alabama," Schneider showed that the Yahoo results page returned zero right-hand rail text advertisements. Performing the same search query on Google, however, results in 11 right-hand rail text advertisements. Under the partnership, presumably, Yahoo users looking for roses in Birmingham would then be served the same 11 text ads.

"It's about delivering the most complete set of results against that search query," concluded Schneider.

And she's right. As a user, I personally find text ads incredibly useful, often more relevant than search results themselves.

The state attorneys-general looking into this Yahoo-Google arrangement are focused on how large a combined market share the two giants will have -- perhaps 90%, and ignoring the benefit the arrangement confers on consumers  -- like me.

Comments

[Plowboy:]

The government does nothing right from war to economy, to collapsed SS to a housing market bubble... yet wants to "investigate" this. Investigate your hiney I'm thinking.

2008 Sep 14 07:24 AM

[GoogleDoubter:]

Any business organizations who wish to work together and end up with 90% market share needs to be scrutinized. Google is not just a company, but an ecosystem that only Google can control. The marketplace doesn't set prices of ads...Google sets those prices with their complex algorythms.

2008 Sep 14 08:55 AM

[andyn:]

oh this is a charade and once the election fervour is over, this will dissipate and no one will talk about this.
As the saying goes - "those who dont learn history are condemned to repeat it".
Let's see whether we revisit this topic year-end. GOOG is so cheap now it should be back in $500s pretty soon.

2008 Sep 14 01:18 PM

[lunchboxchick:]

The government for the most part is ill equipped to make policy or decisions on matters having to do with the internet and/or technology. They simply kneel to the pressure when applied by huge interest groups as this national advertising whozywhats. When federal anything learns about progress anything, maybe I'll care about whatever they find to whine about. But in the meanwhile, I'd much rather see government focus their attentions upon all of the matters they have failed to address for far too long.. and keep their short sighted opinions and ignorant tactics out of the way of progress, innovation. It is already painfully evident that government and intellectual properties bear no relation to each other, whatsoever.

2008 Sep 14 06:27 PM