Jerry Yang defends Google deal

'It may seem counterintuitive, but ...'

Shaun Nichols in California, vnunet.com 16 Jun 2008

Yahoo chief executive Jerry Yang has defended his company's decision to eschew Microsoft once and for all by partnering with Google.

Shortly after the deal closed on Thursday, Yang posted an article to Yahoo's Yodel Anecdotal corporate blog stating his case on why joining forces with a former rival is the right move for the company.

"We have done something important today. We are directly addressing one key element in Yahoo's strategy to lead the way in search and display," wrote Yang.

"I believe it puts us on a faster track to creating stockholder value and strengthening our advertising leadership."

Under the deal, Yahoo will allow Google to sell and display AdWords advertisements alongside Yahoo search results.

Yang maintained that the deal will allow Yahoo to bring in more money to push its Panama search ad business in the long term.

"We will retain complete flexibility and will call the shots on where and how often Google ads will appear," he wrote.

"While Google has better advertiser coverage in some query areas, we still have the ability to provide Panama ads where they are most valuable."

Yang also addressed antitrust concerns about the deal. Since word became public, critics such as Microsoft have argued that the deal would consolidate business to an unfair level.

However, Yang insisted that the deal would actually help make the market more competitive.

"It may seem counterintuitive that doing a deal with a competitor would improve our competitive position," he said.

"But as search and display continue their convergence, [the deal] puts Yahoo in a better position to innovate and compete aggressively with Google and others for ad dollars.

"It also offers advertisers more choice, and publishers gain better distribution and monetisation to grow their business."

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