Newspapers Around World Oppose Yahoo-Google Ad Deal

The World Association of Newspapers (WAN) this morning asked the US Department of Justice, the European Commission and the Competition Bureau of Canada to block the deal under which Google (NSDQ: GOOG) will supply some advertising to Yahoo (NSDQ: YHOO). Paris-based WAN, an umbrella representing 18,000 newspapers, argues it will lessen ad revenue the pair provide to newspaper and other sites.

President Gavin O’Reilly: “Competition forces each company to offer the best possible terms and helps ensure that newspapers earn a fair market return for the right to display ads and search boxes on their sites. The proposed advertising deal between Google and Yahoo would seriously weaken that competition, resulting in less revenues and higher prices for our members. More in extended entry…

“WAN is also concerned that this deal would give Google unwarranted market power over important segments of online advertising. Advertisers will increasingly migrate to Google since they will see diminishing price advantages to advertising through Yahoo. Google has refused to allow Yahoo to show Google ads on the websites of new publishing partners it acquires after the deal is finalized – in other words, Google has imposed a condition that impedes one of Yahoo’s last remaining opportunities to compete with Google. What this means for newspapers is that Yahoo’s bids for their ad business will almost certainly be lower than they are today.”

Though the deal only covers north America, WAN says European newspapers would be directly harmed, too. The companies submitted the proposal to a voluntary 100-day review when they brokered the deal to avert Microsoft’s (NSDQ: MSFT) Yahoo takeover in June. But they say the project will kick in next month regardless of the anti-trust outcome, which they expect to be positive. WAN has previously clashed with Google over its refusal to adopt the ACAP standard for crawling news content. The newspapers have already bought in to Yahoo in a significant way, of course; a consortium of almost 200 US papers runs Yahoo ads.