U.S. advertiser group objects to Google-Yahoo tie up

By Gina Keating

LOS ANGELES (Reuters) - The Association of National Advertisers sent a letter objecting to the proposed Internet search advertising partnership between Yahoo Inc and Google Inc to government regulators reviewing the deal, the group said on Sunday.

The letter to Assistant Attorney General Thomas Barnett, noted that "a Google-Yahoo partnership will control 90 percent of search advertising inventory," the ANA, which represents major U.S. advertisers, said in a statement.

The partnership "will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising," the statement said.

Barnett could not be reached for comment on Sunday.

Yahoo "remains steadfast in its belief that this deal -- in which prices are determined by advertiser demand-driven auctions, not by collaboration between Yahoo and Google -- will strengthen Yahoo's competitive position...and will help to drive a more robust, higher quality...marketplace for our advertisers," the company said in a statement on Sunday.

Google spokesman Adam Kovacevich said "numerous advertisers have recognized that this agreement will help them better match their ads to users' interests, and that ad prices will continue to be set by competitive auction."

"While some have raised questions about the agreements' potential impact on ad prices, advertisers care far more about getting a good return on their advertising dollar than they do about buying cheap ads that don't bring in customers, and this agreement will clearly help advertisers reach Yahoo users more efficiently," Kovacevich said.

Yahoo struck the agreement in June with Google, the world's dominant supplier of Web search services, as it sought to shore up its advertising business and ward off pressure to merge from Microsoft.