Yahoo President Defends Google Ad Pact

Sam Gustin writes: Sue Decker, Yahoo's president, doesn't want you to believe everything you hear about her company's controversial search ad partnership with Google.

So she's just published a post on Yahoo's corporate blog for the purpose of what she calls, "myth-busting."

Regulators and a number of states have ramped up their scrutiny of the deal, which would allow Google -- the Web search leader -- to begin serving ads on sites run by Yahoo, the number two search company. Yahoo estimates the pact could increase its revenue by $800 billion.

The Justice Department has hired Sandy Litvack, a top antitrust lawyer to consult on the probe, and two prominent industry groups have urged opposition to the deal, calling it anti-competitive.

Decker called their fears overblown.

"You may have heard that the agreement gives Google control over 90 percent of search advertising," Decker writes. "That's just plain wrong. It's simply a contract that gives Yahoo! the right, but no obligation, to show Google AdSense ads on Yahoo!'s own network."

She goes on to say that Yahoo and Google will not engage in the price fixing that many of the deal's critics have warned about.

"We are not in any way going to be coordinating or setting search term pricing with Google," Decker writes. "The fact is that advertisers set prices by bidding in our real time auctions."

Finally, Decker seems to be making something of a veiled threat by urging support for the deal -- or else.

"It's a great opportunity for Yahoo!, and we're committed to implementing it in a way that produces the most value for advertisers and users," she writes. "Ultimately, that's the only way we can provide value for Yahoo!'s stockholders."

Antitrust regulators may or may not challenge the deal, but judging by the stridency of Decker's post, it seems like she may feel a showdown with the government is inevitable.