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Google-Yahoo Ad Deal a Price Fix- Microsoft

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yahoo_founders.jpgMicrosoft attorney Greg Sivinski has condemned Google and Yahoo’s online advertising deal as a price fix meant to stifle competition. He said this during a panel discussion of online advertising at the Aspen Summit hosted by the Progress & Freedom Foundation, a Washington, D.C., think tank

“Price fixing is a complete red herring,” retorted Google chief economist Hal Varian. He added that advertising revenue generated by Internet search engines is determined largely through a competitive auction.

The battle of words between Google and Microsoft comes after a rough few months for Microsoft in its attempt to get a bigger foothold in the multibillion-dollar online search advertising business. Microsoft has been trying to buy Yahoo, but has been rebuffed, while Google was able to strike the long-term advertising deal. In the meantime, Microsoft’s market share in the search- engine business has been declining.

Google, by far the most dominant Internet search engine, earlier this month disclosed a heavily redacted copy of its proposed 10- year advertising partnership deal with Yahoo.

The agreement calls for Google to provide Yahoo with ads and advertising services that would augment Yahoo’s own online advertising platform.

Microsoft and others have complained that Google and Yahoo haven’t disclosed exactly how revenue would be shared, and haven’t made public other business ties between the companies.

The U.S. Justice department is currently reviewing the deal

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