Yahoo, Google Ad Deal Delayed By Regulators
Last Friday, Yahoo issued a statement addressing the probe being conducted on U.S. soil.
"The companies have agreed to a brief delay in implementing this agreement to continue our ongoing discussions with the (U.S.) Department of Justice," Yahoo said in a statement. "We have had discussions with regulators and look forward to responding to their questions about this agreement."
Google issued a statement later in the day echoing Yahoo's, noting that approval of the deal was expected to take place in October.
"When we announced our advertising agreement with Yahoo in June we agreed to delay its implementation until October to give regulators time to look at the details," Google said in a statement. "As we are still in conversation with the Department of Justice we have agreed to a brief delay in implementing the agreement while those discussions continue."
A source with knowledge of the investigation said that the delay won't last much more than a month, Reuters reports.
Reaction across the industry has been mostly critical since the announcement of the ad deal between Google and Yahoo, with the World Federation of Advertisers decrying the pact last month.
"The World Federation of Advertisers (WFA) fears that the proposed advertising alliance between Yahoo and Google will have a detrimental effect on competition, result in price increases and reduce the options available to advertisers worldwide ... Although Google and Yahoo insist this agreement is limited to North America, WFA believes that the effects will be global. One reason for this is that the substantial benefits for both parties in the US and Canada will almost certainly reduce their incentive to compete in other markets as they do today," said the WFA in a statement on its Web site.
Senator Herb Kohl, a democrat from Wisconsin, recently wrote a letter to the Department of Justice advocating that the potential deal be monitored and, should the competitive landscape change if the deal is approved, be re-evaluated.
"Recognizing the nascent and fast-changing nature of this marketplace, we encourage the department to continue to monitor the state of competition in this industry, whatever the outcome of its current investigation," wrote Kohl. "If, over time, you determine that Google is gaining a dominant market position as a result of the Google-Yahoo agreement, then we would encourage the Justice Department to intervene to protect competition."
But Google and Yahoo have been vocal in defending the non-exclusive ad deal. In fact, Google defended the potential partnership with Tim Armstrong, president, advertising and commerce North America, writing posts on the Google Public Policy Blog.
Still, the potential deal has been delayed as regulators continue with their investigation, meaning the Google-Yahoo deal is still at least a few weeks away.