Here’s some good news for small business owners concerned about fewer choices and potentially higher prices in the online advertising world. Google and Yahoo! have abandoned their advertising agreement, which means more focus by these companies on competing, innovating and providing small businesses with more useful tools to help push their products and services during these tough economic times.
Faced by definite legal action by the U.S. Department of Justice (government lawyers told the companies they would block their agreement using their antitrust powers), and a large chorus of advertisers and businesses that cried “foul” about Google and Yahoo! joining forces, the companies made the decision to simply move on.
"The arrangement likely would have denied consumers the benefits of competition –lower prices, better service and greater innovation," said Thomas O. Barnett, Assistant Attorney General in charge of the Department’s Antitrust Division.
According to the Department, the agreement would lead to 90 percent or more market domination in Internet search advertising and search syndication.
A statement by Google said that moving forward with the agreement presented a lose-lose for the company and its relationships. “Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn't have been in the long-term interests of Google or our users, so we have decided to end the agreement,” according to the statement.
Although Yahoo! said the agreement would have helped to “accelerate its investments in its top business priorities through an infusion of additional operating cash flow,” ending the agreement will not effect the company’s commitment and ability “to innovation and growth in search.”
“Going forward, Yahoo! plans to continue to provide the cutting-edge advances in products, platforms and services that the industry needs and expects, and intends to be the destination of choice for advertisers and publishers who want to reach one of the largest and most engaged populations of consumers on the web,” said the company in a statement.
As many entrepreneurs well know, the Internet has been the great equalizer in enabling smaller firms to find and develop new markets, and broaden their marketing efforts in efficient ways. With the close of their agreement, both Google and Yahoo! say they are determined to stay committed and focused on their customers and innovations. That’s a great outcome for small businesses.
Karen Kerrigan
President & CEO
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