The Google-Yahoo ad deal has come under a lot of scrutiny recently. As I reported earlier, in the wake of Microsoft’s failure to acquire Yahoo, the search company made a deal with Google whereby Google would display ads on Yahoo’s pages. Google and Yahoo are delaying implementation of the deal in order to give regulators the chance to mess it up. Now, it’s looking like they might.
But antitrust concerns surrounding the deal are ridiculous. In 1998, Yahoo had total dominance over the search market. It had “a monopoly of eyeballs, which was sure to lead to a monopoly of revenue. And this dominance must have continued forever, just as commentators predicted. Yahoo became a “Rule Maker,” nay, a kingmaker. Yahoo had ordered the chaotic internet and then set all of its rules, making any dissenters and all upstarts sit down and listen. Since ten years ago Yahoo was the top dog search engine and was going to remain that way forever, there is no way that some company I’ve never even heard of – Goo-what? – could have come out of nowhere and challenged it. How can one fight such a monopoly in a dynamic, fast-moving industry? Unheard of.
So, since Yahoo obviously must be the dominant search engine – no, the dominant internet company – because of the stranglehold on the internet it acquired ten years ago, why worry that it is now getting its ads from this pathetic-sounding little company? Clearly, it is Yahoo and Microsoft – or is it Altavista and IBM? – whose monopoly power should concern us.