• Ad Age, Wednesday, July 16, 2008 10:45 AM

GroupM Worldwide CEO Rob Norman, in a guest column for Ad Age, discusses the implications of a Google-Yahoo search partnership, saying it would lead to a "de facto consolidation" in U.S. search that would be bad for advertisers. "The per-click price of search will continue to rise if other channels deliver less volume and efficiency, and, if not capped by internal competition in the market, they will rise to a fraction below the costs of non-search channels," he writes.

In other words, Norman is saying the cost of buying keywords will inevitably rise to the point at which search is no longer profitable for advertisers. A monopoly would only speed up that process. "A monopolist can rapidly test the price elasticity of the market and arrive at a moving 'one penny less' price pretty quickly," he writes, adding that an auction-based monopoly is no different.

"Somewhere a line needs to be drawn to protect the market," Norman claims. "A monopoly is a monopoly -- even if arrived at by totally fair means -- and all monopolies require regulation to protect wider economic and social interests."

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