Following months of fending off a Microsoft takeover, Yahoo announced last week that they had entered into a non-exclusive advertising agreement with Google. Much in the same way many were concerned about a Yahoo-Microsoft merger, there are already those skeptical of a Yahoo-Google arrangement, including some pretty prominent lawmakers.
Rep. Joe Barton (R-TX), the ranking member of the House Energy and Commerce Committee, wrote a letter to Yahoo CEO Jerry Yang on Thursday, expressing his concern about Yahoo’s recently announced deal with Google:
“I am concerned about how this collaboration will impact competition within the online search advertising industry,” said Barton.
Under the terms of the deal, Google will provide Yahoo with access to AdSense for search and AdSense for content adverting programs on their U.S. and Canadian web properties. The companies have also said that they will work to enable interoperability between their respective instant messaging services.
In addition to his concerns with regards to competition in the online advertising industry, Barton also takes issue with privacy matters, and the amount of data Google and Yahoo can gather about an individual:
“I am also concerned about how the relationship between Google and Yahoo will affect the collection, storage, and use of data relating to an individual’s online activity” said Barton.
In his letter, Barton requested that Yang provide him and the committee with answers to a few questions. Amongst the questions that the committee has is who initiated the talks about the ad deal, and an explanation of the criteria Yahoo will use to determine the search queries and pages that Google ads will appear on, as well as how that criteria was developed, and how it will help Yahoo users. Furthermore, the committee would also like Yahoo to explain how they came to the projected $800 million in increased revenue as a result of the deal, what kind of data Google will have access to, how cookies will be handled, and why the deal is not anticompetitive.
Barton and the committee has given Yang until July 18 to issue a reply.
The House Energy and Commerce Committee isn’t the only committee that will be scrutinizing the deal. Senator Herb Kohl, chairman of the Senate Antitrust Subcommittee, said he too will closely examine the deal.Smartly, Google and Yahoo decided to delay the implementation of the deal for a few months, to give lawmakers time to look it over. Both parties, however, insist that the deal is not anticompetitive.
