Business Startup- Expert Advice For The Digital Marketer

With an antitrust investigation brewing over its advertising deal with Yahoo, Google is going on the offensive in trying to answer its critics and push the deal through. CEO Eric Schmidt told reporters yesterday that all the scrutiny is being orchestrated by Microsoft and that Google plans on going ahead with the deal anyway.

Last week, Google’s chief economist Hal Varian gutted a study that claimed a Yahoo-Google advertising alliance will result

in a 22 percent increase in advertising rates. And today, Google’s advertising chief Tim Armstrong reiterated some of Varian’s points in an attempt to dispel the notion that the advertising deal with Yahoo will raise prices. From Armstrong’s post on the Google Public Policy Blog:

Question: Will the Google-Yahoo! agreement raise ad prices?
Answer: Neither Google nor Yahoo! set ad prices. Ads are priced by an auction where an advertiser only bids what an ad is worth to them.

Question: Can Yahoo! pick whose ads to show based on who has the highest price?
Answer: No. Under the terms of our agreement Yahoo! won’t be able to see the current auction prices for Google ads, and Google won’t be able to see Yahoo!’s prices.    Continue Reading

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