Google-Yahoo Deal Under Investigation by Justice Department

By G.L.C., on October 20th, 2008

The high-profile advertising partnership between Google and Yahoo announced in June after merger talks between Microsoft and Yahoo collapsed could run into a challenge from the U.S. Justice Department. The Association of National Advertisers, the American Association of Advertising Agencies, and the International Advertising Association have expressed concerns about the deal and asked the Justice Department to investigate and block the deal. Many advertisers have warned that the deal will limit competition, raise prices, and reduce choices.

Last month the Justice Department hired veteran antitrust attorney Sanford Litvack to help assess the evidence gathered by its lawyers in what many see as the clearest indication that the Justice Department could be planning to mount a legal challenge to the deal which allows Google to sell ads alongside some Yahoo search results on some of its Web sites. Google dominates the search advertising market. It is feared that the deal will reduce competition in the search advertising market and lead to higher prices. The real concern of antitrust law is to protect consumers–-the advertisers. Investigators trying to build a lawsuit to block the deal worried are that it could give Google too much power.

The two companies have maintained that the deal does not violate antitrust law and recently agreed to delay implementing the deal until at least October 22 to give the investigators–-federal and state–time to scrutinize the deal and complete their investigations. According to them, the deal would serve advertisers and users more effectively.

Both companies are in talks with the Justice Department in an effort to prevent any challenge to the deal. The negotiations are at an early stage and both companies have discussed concessions including capping the volume of Google ads Yahoo would use, assurances that Yahoo would continue to compete in search ads, and a reporting mechanism to ensure compliance. A reporting mechanism could require the companies to disclose details about their closely guarded search advertising technology. The disclosure requirement could require disclosing more than what they really want to disclose. The Justice Department will try to impose measures to ensure that advertisers won’t have to pay prices that are significantly higher.

Any settlement reached would likely be laid out in a consent decree that would be filed in court allowing the deal to go ahead. If the deal does go ahead, many feel it will be a formal recognition of Google’s market powers constraining its future conduct. It could draw private antitrust suits–opponents of the deal including Microsoft have been provided with documents and depositions for use in possible litigation.

Some experts are looking at the appointment of Mr. Litvack as an effort by the Justice Department, which in the past has been criticized by some in Congress for its approach to antitrust enforcement, to deflect any political fallout from its ultimate decision.



Leave a comment   Business, Politics and Government   , ,  

Should Physicians Advertise for Their Services?

By J.C., on August 19th, 2008

We’ve been talking a lot here about physicians and the business of running a medical practice. Lately, I have been seeing a growing number of physicians advertise on television. This makes me wonder – Should physicians advertise for their services?

In some circles many feel that it is unethical for physicians to advertise. It is sort of like ambulance chasing attorneys. More and more I am seeing cheesy ads by Plastic Surgeons on TV. They brag about how you can get a breast augmentation and how no one will even know. They talk about how they stand out above all other plastic surgeons. It all seems so tacky to me, kind of like the lawyers who advertise on TV.

Everybody knows that when you look for a lawyer you don’t find one from a TV ad. In general you find one by word of mouth and referral. The same goes for doctors. If you want to find a good specialist, you see your primary care physician who refers you to who they think is a good specialist. That is the way insurance companies want the business to work. Your primary care physician is the “gatekeeper” who handles and approves the referrals.

Television advertising does appeal to mass populations. However, most lay persons do not know who is a good doctor and who is a bad doctor. Although there are websites out there that now provide patient feedback and opinion on doctors, the truth is that only people who work closely with that doctor know how good they are. Thus one good way to find a doctor is to get in touch with your doctor friends and people who work in the healthcare industry. They will give you the skinny on that doctor you are considering seeing.

So what is the deal with physicians and advertising? Well you will find that physicians who advertise do so because they are in a lucrative field and want to drive up their business. Alternatively it may be the medical center or hospital they work at who would like to advertise a special “center” where that doctor works. For example, a regional cardiac center may want to brag that they have the best heart specialists. Thus they will put up a billboard or TV spot advertising their center with the faces and names of their heart doctors.

In general I believe doctors have the right to advertise their business, but I am not a big fan of it because I don’t believe it places physicians in a good light.



2 comments   Healthcare   , , ,  

Gas Prices: Print Media’s #1 Enemy

By Mark Mahorney, on July 6th, 2008

At over $4 a gallon, gas is definitely putting the pinch on consumers. Wired writes, “No Mocha For Me, Thanks. I’ve Gotta Buy Gas.” We aren’t sweating the little things; we’re simply cutting them out.

The media is self-centered. It loves to write about itself without regard for whether its audience is interested or not. Lately, everywhere I turn I see “the death of print” articles sniveling over the struggling newspaper and magazine industry. They put the blame squarely on the Internet.

I squarely disagree with this assessment. No doubt some advertising dollars have shifted to the Internet and some readers have shifted their viewing to the Internet. So it’s a contributing factor.

But at the heart of it is gas prices. Consumers are having to divert a few hundred dollars a month to gas. Where does that money come from? It comes out of discretionary income, the money we have left over after paying our bills. It’s the money we spend on mochas, newspapers, magazines, and going out to eat.

One of the first things consumers are going to cut back on is newspapers and magazines. They’re still reading, but instead of paying for paper, they’re turning to the Internet and cutting out the cost of delivery. So the media is out the markup.

But more importantly, advertisers go where the readers are. It’s not that advertisers are preferring to advertise via the Internet necessarily, but rather advertisers are ticks and leaches. They go wherever consumers go. And gasoline prices have driven consumers to the Net.

Will they go back to print when times are better? That depends on how long it takes for the economy to recover. In part, they will become used to getting more of their info via the Net. Technology companies are finally seriously committed to coming out with products that make getting information from the Net easier and more portable. We’re seeing more UMPCs and Netbooks offerings, larger screens on cell phones, and better batteries. And the media is making their content easier to access via feeds.

Eventually, the economy will improve as it always does, but by the time that happens we may have already moved on and left print behind.



3 comments   Business, Personal Finance, U.S. Economics   , , ,