Thursday, 15 May 2008

Google hoping to extend ad deal with Yahoo

The New York Times reports that Google executives have expressed a desire to develop the advertising relationship with Yahoo! that was tested for several weeks recently with AdWords appearing alongside Yahoo!'s search results. This is partly a move to ward off any possible future attempts by Microsoft to make a bid for Yahoo! but could also be a lucrative development for both Google and Yahoo!

Any arrangement, should it go ahead, would face antitrust investigation in the US due to the dominance of the search advertising market by the two companies. It would also have serious implications for Yahoo!'s own PPC advertising system, which is still struggling to compete against Google, despite a facelift and relaunch in recent years. Such a move would also place even more power within Google's control and advertisers would have even fewer options to place search advertising so that bid rates would continue to rise.

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