Google lobbies to block Microsoft Yahoo Search advertising cooperation deals

Google is now doing its best to publicize its views, as U.S. Justice Department officials are investigating Microsoft's deal with Yahoo. "Scale is really useful, but in a way, when it comes to advertising, it only lowers returns," says one Google executive. At the moment, most of our competitors are at this level. ”

Active lobbying

Another Google executive described Google as "actively" lobbying against Microsoft's Yahoo deal. Google, however, said the company's approach was merely a response to the Justice Department's request for advice. In public, Google's view of the deal is largely conveyed by the comments of some executives. For example, Hal Varian, Google's chief economist, said in an interview with CNET last month that Hall Fanrian's justification for the size of Microsoft's Yahoo was "hypocritical".

Hal Varian said at the time that the world's current annual search growth of 40%, the expansion of data size does not necessarily lead to a superposition of market share growth. Hal Varian also noted that Microsoft's improvements to its search engine had led to a rise in market share after the launch of Bing. This can be a strong proof that, regardless of Yahoo, Microsoft is able to compete in the search market.

It is unclear how much the Google debate has resonated with justice officials and whether it will hinder the Justice Department's review of Microsoft's Yahoo deal. So far, the Ministry of Justice has not made any specific comments on the Microsoft Yahoo Transaction survey. "The Justice Department is still soliciting views on the Microsoft Yahoo deal it is investigating," said Jeff Chester, executive director of the Digital Democracy Center at the Consumer Rights protection group in the US Geoff Chester. But it is not surprising that few advertisers and marketers have objected to the deal at the moment. ”

In addition to the Ministry of Justice, Herb Kohl told Herb Kohl, chairman of the U.S. Senate Judicial Antitrust Commission, is also conducting a parallel investigation of the deal. Cole will decide in the near future whether to hold hearings on this deal. Cole initially said the deal "requires careful scrutiny" but has no plans to hold hearings.

Google's pricing power

Ben Edelman, an assistant professor at Harvard Business School on internet advertising and Ben Edermann, a Microsoft consultant, said Hal Varian's explanation of size did not capture the point. It argues that Google's size allows it to enjoy huge scale benefits, including pricing power. He explained that a company that uses three search engines at the same time will find that Yahoo's price is 30% lower than Google's, and Microsoft's price is 27% lower than Google's.

"For me, the problem is incredibly simple, and the advertising agency will certainly want to reduce its competitors in the search field from three to two," Edelman said. Because they want the second-ranked search engine provider to be an important choice. ”

Google cannot make a stand in the way of blocking Microsoft's dealings with Yahoo, which has many of its own concerns, including a settlement agreement with the authors and publishers opposed by the Justice Department, plus a possible congressional hearing on privacy issues. It can be said that it is very difficult for a company of a large scale to justify its size without determining all the problems.

The Justice Department has held objections to Google's attempts to co-operate with Yahoo. Now, the Justice Department will have to decide whether the second-and third-ranked company will be able to make the search market more competitive. "The law does not limit similar mergers, but there is a strong bias in allowing the deal to be approved," said Albert Foer, chairman of the US Antitrust Association, Albert Fore. "Deval also said that advertisers do not seem to oppose the deal,