Filed under: Industry, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Marketing and advertising

In a move that makes all the sense in the world, The Association of National Advertisers is telling the Justice Department and anyone else who will listen that the deal for Google (NASDAQ: GOOG) to sell part of Yahoo! (NASDAQ: YHOO)’s ad inventory is a bad idea. Perhaps the ANA was paid-off by Microsoft (NASDAQ: MSFT), which also objects to the deal.

The association is pretty powerful and includes companies like Procter & Gamble (NYSE: PG) and GM (NYSE: GM). The members could cut their ads on Yahoo! in protest whether the U.S. government pays any attention to them or not. That would hurt both search companies, perhaps a lot.

According to The Wall Street Journal, Bob Liodice, chief executive of the ANA, said the group believes the “deal is, on balance, a negative” for advertisers.

It is hard to make an argument that the ANA is wrong. If Google controls inventory at both companies, it certainly has tiny incentive to keep ad rates low. That would obviously injured its own margins and cut the benefits of the deal for Yahoo!. If Google is trying to keep Yahoo! out of Microsoft’s hands, the superior the deal is for Yahoo!, the more likely it is that the large portal company can stay independent.

The ANA objection might carry more weight than any other. Its members are the ideal group to make the case that the new partnership will damage them since they already spend so much money with Yahoo! and Google. Their complaint may be the one thing that keeps the tie-up from going through.

Douglas A. McIntyre is an editor at 247wallst.com.

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This entry was posted on Monday, September 8th, 2008 at 3:37 pm and is filed under Marketing and Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.