Google-Yahoo Deal Went to the Brink ... and Google Blinked

 
 
By Roy Mark  |  Posted 2008-12-04 Email Print this article Print
 
 
 
 
 
 
 

In November, just hours before the government planned to file an anti-trust lawsuit accusing Google of engaging in monopolistic behavior through its advertising deal with Yahoo, the search giant pulled the plug on the transaction.

According to Sanford Litvack, the outside counsel hired by the Department of Justice to investigate the deal, "We were going to file the complaint at a certain time during the day. We told them we were going to file the complaint at that time of day. Three hours before, they told us they were abandoning the agreement."

In an interview with AmLaw Daily, Litvack said he was prepared to charge Google and Yahoo with violating the Sherman Act, which prohibits unreasonable restraints of trade or attempts to monopolize trade.

"It would have ended up also alleging that Google had a monopoly and that [the advertising pact] would have furthered their monopoly," Litvack told AmLaw Daily.

Google and Yahoo announced June 12 they had reached a nonexclusive deal to run Google's search and contextual advertising technology through its AdSense for Search and AdSense for Content advertising programs on the Yahoo search engine. Both Google and Yahoo, the nation's top two search engines, maintained that the deal would not hurt the competitiveness of the online advertising market.

Microsoft, which spent much of 2008 attempting to buy Yahoo to bolster its own search efforts, vehemently objected to the deal. Litvack, though, said Microsoft's objections did not influence his decision to file an anti-trust suit.

The DOJ issued a statement on Nov. 5 that the government's investigation showed that Internet search advertising and Internet search syndication are relevant anti-trust markets and that a Google-Yahoo advertising collaboration would have resulted in combined market shares of 90 percent and 95 percent in the search advertising and search syndication markets, respectively.

According to numerous accounts, Yahoo was prepared to take the fight to court, but David Drummond, Google's chief legal counsel, said "pressing ahead risked not only a protracted legal battle, but also damage to relationships with valued partners."

 
 
 
 
del.icio.us | digg.com
 
 
 
 
 
 

Submit a Comment

Loading Comments...

 
 
Manage your Newsletters: Login   Register My Newsletters























 
 
 
 
 
 
 
 
 
 
 
Rocket Fuel