Yahoo makes its Google search advertising agreement public
Updated August 9 at 10:21 a.m. PDT, with more perspective on the agreement.
Yahoo on Friday released a copy of its controversial search advertising partnership agreement with Google, marking the first time details of the deal have been made publicly available.
But before laying your hands on a copy of the document, be forewarned that it is heavily redacted.
For example, a number of entire sections and their headings that explain how the deal will work are completely redacted, such as sections 2.1.4, 2.1.7, 2.3, 2.12, 2.13, 2.14, and 2.16.
The agreement was included as an exhibit to Yahoo's quarterly financial statement, which the Internet search pioneer filed with the Securities and Exchange Commission.
Yahoo's advertising partnership with Google is currently receiving a formal review by the U.S. Department of Justice, which is examining whether the deal will raise antitrust issues. Meanwhile, various attorneys general are also investigating the deal for possible antitrust violations, including those in Connecticut, Florida, and Arkansas. Congress held a hearing last month to discuss the agreement, although it has no regulatory powers to either bless or nix the deal.
Under the agreement, Yahoo will serve up Google's advertisements alongside its own search results. Yahoo has previously said it does not believe its open-ended deal is anticompetitive, citing it is under no obligation to run a certain number of Google's ads, or give its competitor's ads favorable placement on its search results pages.
Microsoft, however, contends the deal is anticompetitive in that it pushes two of the top three players in the Internet search advertising market together.
And in addition to the antitrust issues, legislators have raised concerns about potential privacy concerns regarding the search advertising partnership.
But the agreement redacts sections 6.6 and 6.7 and their subheadings on how information, such as users' personal information, will be used used. And information relating to whether privacy protections exist in the agreement is difficult to ascertain looking at the document, given the place where it would most likely appear, sections 1.73-1.75, is completely redacted.
Yahoo, however, on Friday announced it would provide users with an opt-out capability from its customized advertising feature on Yahoo.com. That decision was in response to a congressional inquiry and a letter sent by the House Energy and Commerce Committee to 34 companies about privacy protections made available to users in targeted advertising and whether they are given the option to opt out of such programs.
CNET News reporter Ina Fried contributed to this story.
Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn.
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OK, so who is the third player?
1) Google controls the ad space
2) Google can "out monetize" any "internet service" by using their superior ad
inventory
3) "internet service" does not include retail/commerce product-related sites
4) Google can therefore out-compete any up and coming web service
5) The money Google makes from the ads goes back into improving the service
6) The ads strengthen their other services, and the services strengthen their ads
7) The more services that display their ads, the more advertisers they get, and
the more they can monetize services
8) Their strength grows unbounded in a feedback loop
9) The monopoly of the network is quite different and arguably superior to mono
polies of lore, notably desktop/software monopolies
Examples:
Take the search space. Their ad dominance gives the funds to improve their search relevance, which grows in popularity and thus feedback into the ads.
Now they are seeking to beat wikipedia using knol, and their ad market dominance.
and Google pays "portal" companies CPM rates 15-20 times over fair market value
to show their search results and ads to their users. Thus starving out any google competitors using a stack of cash.
and, yes, they do have a better mousetrap, inarguably, but it is very difficult
for anyone to compete against them because of the amount of cash their ad monopoly generates, because a lot of that cash goes back into making the mousetrap
better and better.
imho, they really should be broken up into 3 pieces:
1) the ad group. the ads should be made equally available to all companies, so
everyone can monetize their web services at the same rate. this will help level
the landscape.
2) the search group. their search is already very powerful, and, like ads, can
also significantly enhance the value of other web services. so it should be carved out.
3) all the other services. news. maps. groups. orkut. etc.
How many parts would you like to break Microsoft into?
Google's services all act as one, and are built upon the same technologies.
I'm a publisher in AdSense. Their ads are available to me, so long as their relevant. Of course they're going to cut deals with larger sites while offering me the standard rates. It's called an economy of scale.
Search and ads are one in the same. If you insist on Google doing this, then Microsoft and Yahoo should be forced to do so as well.
As for Gmail, Maps etc, why? Gmail is superior (at least for my needs, and apparently many other people as well) to Yahoo and Live Mail etc. Why? Because of Google's technology and Google's willingness to COMPETE. Microsoft BOUGHT Hotmail. Yahoo had let their mail stagnate. Google innovated, and convinced millions to switch from another e-mail provider. That's a feat.
Google might have a huge portion of the market, but they've gotten there in a legit manner. When someone offers a better service, I'll switch, I promise you that.
When they release their info I will unblock them.
Yah-who?
P