Groups raise concerns about Google/Yahoo pact

Advocacy groups representing rural voters, farmers and Latinos have doubts about a possible advertising partnership between Google and Yahoo, saying the pact could create a "monopolistic concentration" in the online search and search advertising markets.

Six groups representing rural voters and farmers sent a letter Monday to the chairmen of the U.S. House of Representatives and Senate judiciary committees, calling for hearings on the proposed partnership.

The two companies would control about 90 percent of the search advertising market, said the letter, signed by officials from the League of Rural Voters, the American Agriculture Movement and four other groups. The Latinos in Information Sciences and Technology Association also raised separate but similar concerns about the proposed deal.

Yahoo announced in early April it would begin testing Google's AdSense advertising platform, about two months after Microsoft first made an offer to buy Yahoo. The Google and Yahoo partnership is not finalized, and Google rival Microsoft could still end up buying Yahoo. Yahoo investor Carl Icahn has repeatedly put pressure on Yahoo to make a deal with Microsoft.

The rural groups' interest in the Google/Yahoo deal is focused on maintaining competition on the Internet, said Larry Mitchell, director of legislative affairs for the American Corn Growers Association, one of the five groups signing the letter to Congress. "We use the Internet a lot in rural America, even though we are kind of on the dirty back road of the information superhighway," Mitchell said.

Until recently, people who searched for the American Corn Growers Association (ACGA) on Google were asked if they meant to search for a competing organization, Mitchell said. More search competition is needed, he said.

"We need more competition in every sector of the economy," he added. "All we're asking for is a congressional look-see."

Asked if the ACGA's recent interest in the issue was driven by other groups, Mitchell denied that was the case. However, the public relations executive identified as the author of the .pdf version of the congressional letter sent by the ACGA and other groups has also worked on campaigns in opposing net neutrality, an issue that Google has pushed for.

A Google spokesman declined to comment on the letter from the rural groups, saying the partnership talks had not concluded. A Yahoo spokesman didn't immediately respond to a request for comments.

However, one source close to the negotiations between Yahoo and Google downplayed the concerns, saying Yahoo would maintain its own advertising network. In addition, concerns about rising prices are unfounded, the source said, because Google and Yahoo don't set prices for search advertising, instead selling advertising by conducting auctions.

In addition, the partnership between Yahoo and Google wouldn't be exclusive, meaning Yahoo could seek out similar deals with other companies, the source said.

The IDG News Service is a Network World affiliate.