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Thursday, October 16, 2008
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Google to meet antitrust queries with straight face

To pull off Google's strategy for calming antitrust fears from its ad search deal with Yahoo, Google legal eagle David Drummond will need to present his case without cracking a smile, a difficult feat at best. According to Google's press release offered ahead of today's hearings before the Senate and House Judiciary Committees, Google's response contains the following hard-to-swallow facts, among others:

* The agreement is good not only for Internet users, but also advertisers and website publishers. (No mention of SearchIgnite's report expecting a cost-per-click bump of nearly 22% for Yahoo advertisers.)

* Yahoo and Google will remain "vigorous competitors," and the agreement will not increase Google's share of search traffic, since Yahoo will continue to exist. (Not only is that a dubious claim, now that Yahoo is struggling with tbe Micrsoft/Carl Icahn takeover bid, but the ad deal actually gives Yahoo a disincentive to compete, since it's structured so that Yahoo earns more money when Google earns more money.)

While the hearings have no actual bearing on the Google/Yahoo deal (that's actually up to the Justice Department's antitrust regulators), they do put Google in the uncomfortable antitrust spotlight. And Microsoft, whose been there all too often, is sure to be watching--and smiling.


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