Urging the DoJ to speed up the approval process

Oct 20, 2009 08:06 GMT  ·  By
Some of the biggest advertising agencies urge the DoJ to speed up the approval process
   Some of the biggest advertising agencies urge the DoJ to speed up the approval process

The proposed Microsoft – Yahoo deal made waves last summer but it still has to get the approval of the regulatory bodies before moving forward and a deal involving the number two and the number three search engines in the market is likely to fall under a lot of scrutiny. But as it awaits approval, it's getting support from some of the interested but not directly involved groups like advertisers. An advertising industry organization sent a letter to the Department of Justice saying that the deal would be very healthy for the ecosystem and that it would spur competition.

Backed by four of the biggest advertising groups in the US, the American Association of Advertising Agencies expressed its support of the merger, which would create a unified advertising unit for Microsoft and Yahoo. Maurice Levy, Chairman and CEO at Publicis Groupe, Martin Sorrell, CEO of WPP, Michael I. Roth, Chairman and CEO of Interpublic Group of Companies, and John Wren, President and CEO of Omnicom Group, all signed the letter sent yesterday.

“A very important form of online advertising is search advertising – the sponsored links that appear when a search engine answers a query. A healthy, competitive market for search and search advertising is crucial to the Internet’s future,” they write urging the DoJ to speed up the process of approval, which is generally expected to have a positive outcome. “We believe that Yahoo! and Microsoft’s proposal to combine their technologies and search platforms is good for advertisers, marketing services agencies, website publishers and consumers.”

Earlier this summer Microsoft and Yahoo finally reached a search deal that boils down to the fact that Yahoo will start using Bing as the underlying technology for its searches. The interesting part in this case is that the two will also share the advertising unit, with the technology also supplied by Microsoft but with Yahoo handling the big accounts.

Normally, the concerns would be that a merger between some of the larger players in the market would limit choice and competition but in this particular case it may be the other way around. With Google serving well over 60 percent of the searches, and subsequent search ads, and Yahoo plus Bing combined coming in at less than 30 percent it’s easy to see why the advertisers would want a stronger competitor. Whether the two will be enough to pose a real threat to Google remains to be seen but it's not only the advertisers that would like to see it happen; Google itself would much rather have a market that at least looks healthier to stave off any anti-trust concerns.