With a deadline looming next week for federal antitrust regulators to approve or challenge Yahoo and Google's controversial search advertising partnership, the search giant has apparently been busy trying to drum up large advertisers to provide public testimonials in support of the deal, according to a report in TechCrunch.
Such efforts could offset concerns expressed by U.S. Department of Justice antitrust regulators over a potential price increase to advertisers as well as reduced competition should Yahoo over time exit the search advertising market. A number of advertisers and a major advertising trade group have already weighed against the partnership.
Google apparently had its outside law firm, Cleary Gottlieb, reach out to its own advertisers such as Darren Nix, president of Silver Financial, which also does business as Reverse Mortgage Guides.
Cleary Gottlieb's Donald Burke reportedly called Nix to ask him to provide a public testimonial supporting the search advertising deal, according to TechCrunch's comments from Nix:
"I received a voicemail from an attorney representing Google yesterday so of course I called back. We spend about US$100,000 a month on AdWords so we'd apparently been targeted because of that. He was looking for large advertisers who use both Google and Yahoo (we do) who would be willing to provide public testimonials in support of outsourcing Yahoo's search ads to Google. I told him I'm a free-market competition kind of guy so he tried to address my concerns for about 15 minutes and then called it quits."
Nix, when interviewed by CNET News, said he was specifically concerned about the potential for prices to rise under the deal, especially if Yahoo finds it is more lucrative to use only Google ads and exits the search advertising business. Publishers receive a revenue split with Google and without Yahoo in the search market, Google may increase its cut of the revenue split, Nix said.
He added he is also concerned that Google may have little incentive to accelerate its innovation, without Yahoo as a viable competitor.
Burke declined to comment. But Google noted in a statement:
"Over the past few weeks we have been reaching out to various Google advertisers to inform them about how the Yahoo ad agreement will work. Since a normal part of the regulatory review process is for government regulators to consider the views of customers, we have asked those advertisers who have expressed support for the agreement if they would be willing to share their views with the Department of Justice. This is a customary part of the regulatory process, and we're happy that many advertisers have expressed their support for this agreement."
Google CEO Eric Schmidt on Thursday, while discussing the company's third-quarter profit, sidestepped questions about advertisers' reactions to the search-ad deal with Yahoo.
"We've got some large advertisers who complain, and other large advertisers say it's good for business," he said.
Schmidt also said Google has been trying to educate people, even its own advertisers, about the underlying system to try to bring people around to its view of affairs, even dispatching chief economist Hal Varian to explain the basics of auction-based ad pricing in a blog post.
CNET News' Stephen Shankland contributed to this report.
This article was first published as a blog on CNET News.com.
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