Growing criticism contends that the deal will give Google an online advertising monopoly


(Computerworld) Google Inc. has stepped up its defense of its proposed search advertising deal with Yahoo Inc. as criticism mounts that the agreement will give the search giant a monopolistic hold on online advertising.

Tim Armstrong, Google's president of advertising and commerce in North America, wrote two separate blog posts late last week defending the proposed deal, which would have Yahoo running advertising from Google alongside Yahoo search results.

In one, he sought to dispel the notion that the deal would lead to increased ad prices, noting that ads are priced by auction, where advertisers only bid what an ad is worth to them. In a second post, he argued that the deal will actually be good for competition because Yahoo will remain an independent company. He noted that had Microsoft succeeded in its attempt to buy Yahoo, the Internet pioneer would have lost its independence.

"Yahoo will continue to run its own search engine and advertising system," Armstrong added. "Yahoo will benefit from Google ads in areas where they have low ad inventory and maintain control over how much and what inventory they make available to Google. Yahoo will invest additional revenue in remaining a viable competitor in advertising."


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