Yahoo + Google = Monopoly???

Last Thursday, Yahoo announced the halt of discussions of a possible strategic partnership with Microsoft. The fallout of a Yahoo/Microsoft deal might be a piece of good news for Google. Right after ending talks with Microsoft, Yahoo announced a strategic advertisement pact with Google.

What makes me worry is that this new partnership may signify a possible monopoly of these two giants in online advertising, with Google controlling almost 70% of US search market and Yahoo, who comes in second place, controlling 17.4%1. I fear that online advertisers may suffer from higher prices because of this near monopolistic partnership.

As I have said in the other posts, the average online ad rate of Google AdWords has increased significantly in the past few years. Take my experience as an example: my AdWords budget to achieve the same number of impressions for my advertisement has risen more than 400% in the past three years. The reason I keep using Google AdWords is there is no better alternative, unless you negotiate ad placements with other webmasters individually. However, this would require a lot of time and effort, and I’m quite sure the results would not be as satisfactory as what you can do with AdWords.

But it seems that in the short run, we have no alternative to this problem.

Microsoft will certainly oppose to the deal by escalating their objection to governing bodies such as the Federal Trade Commission and the Directorate General for Competition of European Commission, asking them to deal with it on an anti-competitive behavior basis. But that process takes time and the results are uncertain.

The only one solution I can think of is buying Google stock (NASDAQ:GOOG) to “hedge” my financial pain of using Google AdWords. 🙂


Tags: Yahoo!, anti-competitive behavior of Google