Antitrust Case against Google-Yahoo Deal

The Sept 9, 2008 issue of The Wall Street Journal mentioned that the Justice Department had hired former U.S. antitrust chief and former Walt Disney Vice-Chairman, Sandy Litvack to investigate the antitrust case against the Google-Yahoo deal. According to the deal, Google will sell and place ads on Yahoo pages and both companies will share the revenue from online advertising. Both companies argue that the deal would decrease competition between the two contenders and would benefit advertisers by increasing their access to potential customers.

The main argument against the deal is that Google controls 70% of online searches, whereas Yahoo only has 20% share of the search market. In comparison, Google usually does a much better job at placing ads online and making money off of it. This could lead Google to persuade Yahoo to sell its share of the search market, therefore giving Google a control of 90% of the search market. This way, Google can monopolize web searches and set higher prices for online advertisers.