Yahoo - Google advertising deal to move forward despite concerns

Despite growing signals that Google's advertising pact with Yahoo might be challenged by antitrust authorities in the US and EU, Google CEO Eric Schmidt said the company expects to implement it, as planned, in October – even if government regulators need more time to assess whether the alliance will diminish competition.

Google already delayed the deal by three months when initial concerns were raised by U.S. authorities. The search giant, however, believes that the deal was designed in such a way to meet government standards and that a further delay will cause the two companies to lose money in advertising revenue.

Schmidt accused Microsoft of stirring up opposition to the deal, which is not at all surprising given that the two companies combined would reportedly control about 80 percent of the search advertising market – leaving Microsoft and Windows Live Search out in the cold. He went on to address concerns that the deal would cause prices to rise for advertisers, saying prices will be set, as always, via auction.

Google’s determination to move the deal forward doesn’t change the fact that it is currently under investigation and could face a legal challenge from regulators. We’ll have to wait and see where this goes.