October 19th, 2009
Ad agencies to DOJ: We like the Microsoft-Yahoo deal
Four big ad agencies, under the auspices of the American Association of Advertising Agencies, has issued a public letter to the U.S. department of Justice supporting the Microsoft-Yahoo partnership, which the pair proposed in July.
The letter, dated October 19, is short and to the point. Here’s the full text:
“Advertising is the fuel that powers the Internet. Most websites depend on online advertising to survive – it’s what allows them to offer consumers free content and services.
“A very important form of online advertising is search advertising – the sponsored links that appear when a search engine answers a query. A healthy, competitive market for search and search advertising is crucial to the Internet’s future.
“We believe that Yahoo! and Microsoft’s proposal to combine their technologies and search platforms is good for advertisers, marketing services agencies, website publishers and consumers.
“These benefits are too important to wait for. As leading members of the advertising and marketing services industry, we urge the Department of Justice to bring its antitrust review to a speedy conclusion. This proposal enhances competition, and should be allowed to take effect as soon as possible”
The Advertising Association’s President and CEO Nancy Hill; Maurice Levy, Chairman and CEO, Publicis Groupe; Martin Sorrell, CEO, WPP; Michael I. Roth, Chairman and CEO, Interpubic Group of Companies; and John Wren, President and CEO, Omnicom Group all signed the note. (Microsoft recently sold its Razorfish ad subsidiary to Publicis Groupe for $530 million.)
Yahoo officials issued a statement on October 19, noting: “Yahoo welcomes the broad support this deal has received, and remains hopeful that the closing of this transaction can occur in early 2010…. In light of the fact that we’re in our quiet period ahead of earnings tomorrow, we’re not able to comment further.”
Microsoft and Yahoo announced their intention to enter into a complex partnership, via which Microsoft’s Bing engine would power a number of Yahoo’s online properties and Yahoo sales reps would sell ads for Microsoft properties. Some Yahoo employees (400 or so) are due to become Microsoft employees as part of the transaction.
The pair is hoping that by pooling their search assets they’ll creat a more formidable No. 2 online search/advertising alternative to Google. The deal is subject to regulatory scrutiny in the U.S. and possibly abroad.
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