• by Tanya Gazdik , September 8, 2008

The Association of National Advertisers said Sunday that it has informed the U.S. Department of Justice it opposes an online search ad deal between Yahoo and Google.

The ANA expressed its objections in a letter to Thomas Barnett, assistant attorney general in charge of the department's antitrust division, and followed a "comprehensive, independent analysis" and meetings with Google and Yahoo executives.

The text of the letter has not been disclosed, but the group says on its Web site that "a Google-Yahoo partnership will control 90% of search advertising inventory" and "will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising."

Under the deal announced in June, Google would supply some of its search ads to run on Yahoo's search pages. Yahoo and Google said they would wait 100 days before implementing the partnership to give federal and state antitrust regulators time to review the deal.

Yahoo has said it expects the deal to generate up to $450 million in incremental income in the first 12 months. It also assured shareholders that they would have full control over which pages the ads would be placed and how they would be displayed.

Still, many industry experts have criticized the deal, arguing that it reduces competition in the search marketplace. Google's share of the search market is upwards of 60% by most third-party accounts, while Yahoo's hovers between 16% and 20%. Opponents like Microsoft say it will give Google too much power, and the Justice Department launched a formal antitrust investigation in July.

Yahoo said in a statement that it was disappointed in the ANA's position. "Yahoo remains steadfast in its belief that this deal -- in which prices are determined by advertiser demand-driven auctions, and not by collaboration between Yahoo and Google -- will strengthen Yahoo's competitive position in online advertising and will help to drive a more robust, higher quality Yahoo marketplace for our advertisers."