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As Google and Yahoo are still having negotiations with the U.S. Justice Dept., the ad partnership seems be put on hold, as it’s now an effort to avoid an antitrust challenge to the proposed agreement. The Justice Dept. and a multistate task force are yet to decide whether to give the go signal to the partnership or not, since it has been heavily criticized by advertising groups, tagging it as anti-competitive for the market.
Though both the companies have hopes to launch the non-exclusive partnership later this month, having Google supply Yahoo with some search ads, under the agreement, which is expected to increase Yahoo’s search revenue, and provide Google with more power in the market.
Here’s what Yahoo expects out of the 10-year deal:
Through the deal, revenue would be raised by $800 million in its first year, and add in providing an extra $250 million to $450 million in incremental operating cash flow.
Whereas Yahoo had expected the intervene and included in the proposal that it would give the Justice Dept. three and a half months to review the deal, before it looks to implement the search advertising partnership.
It’s clear why Yahoo has high hopes from this deal, as Hitwise’s most recent stats state that Google’s share of the U.S. search market reached 71 percent in August, as compared to Yahoo’s 18.26 percent.
This would be very bad news for Search Engine Marketing.
The combined market share would be tremendous and there surely must be laws in place to stop this kind of collaboration to corner the market.
Makes one stop wondering and accept the fact that Google’s slowly but firmly taking a good hold of the market.