To print: Click here or Select File and then Print from your browser's menu

This story was printed from silicon.com, located at http://www.silicon.com/

Story URL: http://management.silicon.com/itdirector/0,39024673,39216147,00.htm

Google execs defend a Yahoo! ad deal
Eric Schmidt: Advertisers always have a choice…

By Stephen Shankland

Published: Friday 09 May 2008

Google's top executives have given a glimpse into how it might try to deflect antitrust concerns of a possible ad-sharing deal with rival Yahoo!, advising observers to look at the overall ad market.

Google co-founder Sergey Brin told reporters: "You are narrowly focused on search advertising. Advertising as a whole is much broader and internet advertising is much broader."

Exclusive Special Report: CIO Agenda 2008

Find out what's hot on the top tech execs' agendas for 2008…

♦  Video: CIO Agenda 2008

♦  Naked CIO: The true cost of IT

♦  Why IT must escape the belt-tightening

♦  Cost-cutting tops CIO priorities

♦  Recession fears hit IT budgets

♦  What governance can really mean to business

♦  The CIO shopping list

Concerns revolve around whether, due the status of Google, a deal with a rival would therefore reduce competition.

Chief executive Eric Schmidt added: "Advertisers always have multiple choices. It makes sense [for advertisers] to always use more than one. It's incorrect to assert there's lock-in or opportunity for dominance in the ad space. Don't map [computer] platform economics to ad economics."

Schmidt wouldn't comment on whether a deal was imminent but one source familiar with the situation expects an announcement next week.

Co-founder Larry Page also specifically said Yahoo! is "strong" in the display ad market. Google's cash comes chiefly from text ads in the form of AdWords, which appear alongside search results, and AdSense, which appear on partners' web pages; Google's acquisition of DoubleClick, though, is designed to improve its display-ad business.

When Yahoo! and Google announced a two-week test under which Yahoo! showed a limited number of Google text ads alongside search results, Microsoft raised antitrust concerns. The partnership also was a major factor in Microsoft's displeasure with Yahoo! acquisition talks.

The two-week test with Yahoo! went well, Brin said.

Brin said: "We had a really good dynamic. We were able to implement it quickly. The technology teams got along well. They were able to get the protocols working very easily and able to gain a lot of insights."