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Google faces an “anti-trust” investigation from the US Congress, following a deal with Yahoo over Internet advertising which industry analysts say could raise prices by more than 20 per cent. The agreement with Yahoo is a blatant ploy to keep the company out of Microsoft’s clutches, and Microsoft executives were vocal about the deal’s anti-competitive nature in their testimony to the Senate and House Judiciary Committee. Microsoft, of course, knows all the ropes in these matters, because its practices have brought it under anti-trust scrutiny both in the US and Europe. The irony, not lost on the US lawmakers, is that Yahoo’s alternative to a partnership with Google is acquisition by Microsoft, which wouldn’t exactly increase competition either. But this is a field where Google is dominant: recent figures from Hitwise show that Google took almost 70 per cent of Internet searches in the US in June, an increase that was partly at the expense of Yahoo – which has just over 19 per cent - and Microsoft, at less than six per cent. Microsoft’s representatives simply added the two figures together in their testimony, saying that the deal would give Google/Yahoo 90 per cent of the Internet advertising market. According to Associated Press, Microsoft VP Brad Smith told the Committee that "Never before in the history of advertising has one company been in a position to control prices on up to 90 percent of advertising in a single medium. Not in television, not in radio, not in publishing. It should not happen on the Internet." Microsoft, of course, has more than 90 per cent of the world market for desktop operating systems, but that’s not the issue here, and anyway, senior VPs of US-based multinationals don’t do irony. AT&T, which controls the US Yellow pages, also criticised the deal. But Google's senior VP of corporate development and chief legal officer told the committee that the partnership will benefit consumers and advertisers “by enabling Yahoo and Google to deliver targeted ads that are more relevant to those who see them”. And not just because of that huge pool of personal information that Google has about us, based on our search histories. "The whole system becomes more efficient: people see and click on more ads that are useful to them ... and advertisers get more potentially interested customers," he said. Yahoo, in turn, believes that the deal will make it an even stronger competitor to Google in the online advertising business. The company calculates it will bring in an extra $250 million to $450 million per year. Microsoft’s argument was backed by a report from search management and marketing specialists SearchIgnite, which examined the cost difference between Google and Yahoo from 12 million search clicks over the first six months of this year, and discovered that Yahoo keyword prices – paid by advertisers - could increase by as much as 22 per cent. Google is finding itself increasingly under attack as its power and influence grows. German data protection agencies have started to monitor its street scanning activities, which are intended to add house-by-house views of cities to Google Earth, to see whether they breach privacy legislation. The UK doesn’t yet seem to be examining this fairly minor contribution to the plethora of privacy issues that are preoccupying our Information Commissioner and others, although spotting Google camera vans in London has already become a favourite spectator sport. Meanwhile, Amnesty International in Australia has warned that it will be confronting Google, Yahoo and Microsoft for agreements with the Chinese government that will effectively block free reporting over the Internet during the Beijing Olympics. Nick Langley Jul 16, 2008 Email this article Printer friendly page Previous Page
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