Google extends the discussions on shared advertising by Zuzana Zelenakova

In June of this year Yahoo announced a partnership with its rival Google under which the former will sell some of its online advertisements displayed alongside search results on its sites to Google. Yahoo searched to increase its revenue by approximately $800 million in the first year, but the move would also give Google more power in the market. "We see this as a good, open, flexible deal and (one that) helps Yahoo be strengthened as a good longer-term competitor," Chief Executive Jerry Yang said back then. But some saw other motives. "They're using this as a tool to boost short-term cash flow," said Canaccord Adams analyst Colin Gillis. "They're trying to keep the wolves at bay." However, both companies were not hasty about setting the partnership into motion and let the Justice Department review the deal. "We believe, given that it's a commercial agreement, there's not formal regulatory approval required,” Yang said. "We agreed with the Department of Justice on a voluntary basis to have them review this deal." The thing is that Google Inc. is still in talks with the Justice Department and apparently will be in the near future as Google Inc. Chief Executive announced on Tuesday a brief delay in the launching of the deal to give the government time to complete the assessment of it. The deal itself is not very popular with other advertisers because it will leave them with fewer options for placing ads and raise the cost of online advertising. And of course it will further strengthen Google´s position. If the government´s decision will not be delivered soon the two companies could just proceed in the implementation of the deal. And if there is a subsequent court challenge from the department – but there is no guarantee that it would come to a lawsuit – Google and Yahoo could fight or simply cancel the deal.


related story: http://news.yahoo.com/s/nm/20081021/tc_nm/us_yahoo_google

by Zuzana Zelenakova for PocketNews (http://pocketnews.tv)

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