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Google: We're Just Trying To Help Yahoo Out
Since Google CEO Eric Schmidt made absolutely clear he will be completing the Yahoo search deal by October 11 despite a continuing Justice Deparment vetting process we can expect some final PR pushes from the Google team trying to blunt fears the match will lead to a monopoly and higher prices.
Google's chief economist Hal Varian took to the company's policy blog this week to quarrel with a SearchIgnite study claiming the pact would increase search prices 22 percent. Tim Armstrong, Google's president of advertising and commerce in North America wrote on the blog that Yahoo's increased revenue from the deal won't come out of advertiser pockets. Today, he's writing about competition.
For the record, Google is all in favor of it. Unlike some people (Burn, Microsoft!):
This agreement - unlike Microsoft's proposed acquisition of Yahoo! - means that Yahoo! will remain an independent company in the business of search and advertising. Yahoo! has stated that it will reinvest the additional revenue from this agreement into improving its user services and competing vigorously against Google, Microsoft and other companies.
But will the deal give Google 90 percent of the search market?
No. This agreement is not a merger. This is about expanding the pie, not dividing it differently. Yahoo! will continue to run its own search engine and advertising system. Yahoo! will benefit from Google ads in areas where they have low ad inventory and maintain control over how much and what inventory they make available to Google.
And what about the fear that Yahoo will get cozy with Google's ads and just give up one day, serving all Google all the time?
By Meghan Keane for Wired.comThe arrangement only covers the U.S. and Canada, and does not cover the fast-growing mobile segment. Yahoo! also has a strong economic incentive to keep serving as many of their own ads as possible, since they get to keep all of the revenue from those ads, while Yahoo! will only receive a part of the revenue from ads served by Google.
Also on Wired.com:
Nation's Spies Still Don't Know How to Share
State's Trolls 'Push Back' Against Anti-U.S. Bloggers
Products Placed: How Companies Pay Artists to Include Brands in Lyrics
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