Google Ads and Yahoo deal rings alarm bells for agencies

Alarm bells are ringing among UK digital agencies over the deal struck between Yahoo and Google last week. Under the agreement, Google Ads will appear on Yahoo search engine results. The deal could boost Yahoo's revenues by up to $800m.

Industry insiders warned that the deal, which was struck Stateside, could have serious anti-trust implications and questioned the effect Google's ever-increasing dominance could have on the UK search sector.

Nigel Gwilliam, head of digital at agency trade association IPA, said: "When the number one and number two search engines join forces, anti-trust alarm bells do start ringing."

Oliver Bishop, chief executive of UK-based search specialist Steak, which has a US office, remains unconvinced by Google's and Yahoo's claim that the deal will facilitate and not hinder competition.

He told Media Week: "Yahoo has a Google dial that it can now turn up and down regarding the Google ads it chooses to display. Should Yahoo need an influx of revenue, turning that dial up becomes increasingly attractive."

Search specialist Bigmouthmedia managing director Lyndsay Menzies called for clarification from the two about which search engine would be driving traffic and what rates would be charged to advertisers. She said: "A critical issue will be whether clients will be able to see which of the two search engines is driving the traffic in our AdWords reports."

At paid search expert Periscopix, founder Simon Norris claimed the move was an admission that Panama, Yahoo's own ad-servicing system, had failed to match up to Google's offering. However, he added, the agreement could turn out to offer a much simpler process for advertisers. "It will be much more straightforward for them to set up and manage their campaigns through a single system that serves the two biggest search sites," he said.

Agencies on both sides of the Atlantic have some breathing space as the deal is subject to a three-month period of voluntary regulation. Longer delays are likely if, as expected, the case is referred by Senator Herb Kohl to the US anti-trust authorities.

However, with commentators tipping the agreement to roll out globally if initial implementation in North America works well, a question mark still hangs over what impact it is likely to have on clients' online campaigns.

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