Response Magazine - December 2008

Google Terminates Agreement With Yahoo!

By Jacqueline Renfrow ( jrenfrow@questex.com)

SUNNYVALE, Calif. and MOUTAIN VIEW, Calif. — Google has called off its agreement with Yahoo!, which would have given Yahoo! the option of using Google to provide ads on its Web sites and partners’ sites in the United States and Canada.

The announcement of the advertising agreement was made in June and both companies were delaying implementation until regulators had a chance to review it. Since then, Google has been faced with threats of an antitrust lawsuit from the U.S. Department of Justice. Yahoo! did propose revisions to address the Department’s concerns.

Google believes the agreement would have benefited publishers, advertisers and users, as well as Google and Yahoo!, by showing more relevant ads for queries that currently generate few or no advertisements. However, Google

felt the benefits were not enough, according to a written statement by David Drummond, senior vice president, corporate development and chief legal officer for the company.

“After four months of a review, in-

cluding discussions of various possible changes to the agreement, it’s clear that government regulators and some advertisers continue to have concerns about

the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners,” writes Drummond.

Google is currently the largest provider of search advertising and Internet search syndication services, with more than 70 percent of both markets, and Yahoo! is the company’s most significant competitor in both markets. For many smaller, online advertisers, this may be a blessing. Consolidation could have meant higher prices and less negotiating room.

While Yahoo! representatives stated they were disappointed, it will “not change Yahoo!’s commitment to innovation and growth in search,” according to a statement from the company. However, just two weeks later, Jerry Yang announced his intention to step down as Yahoo!’s CEO.

NEW YORK — The Direct Marketing Association (DMA) has laid off more than 10 senior level staff members, the third round of downsizing in the organization this year. The announcements were made following the association’s annual convention in Las Vegas in mid-October.

“Like so many prudent businesses, DMA is restructuring to ride out the current economic situation ensuring we remain strong and capable of continuing to provide outstanding service to our members and customers well into the future,” reads a statement from the DMA. “It is our intent to enhance our members’ DMA experiences, build upon our strengths and continue to improve and deepen the value of DMA to the growing direct marketing community. It would be inappropriate to discuss individuals affected by this restructuring.”

The cutbacks were not a surprise, since rumblings of more downsizing were heard all around the association’s annual conference. There was also speculation due to the association’s significantly reduced revenue. In a recent annual report, the DMA reported $39 million in revenue for

the fiscal year ending in June 2008. Just one-year prior, revenue was $39.7 million. Operating expenses were up to $39.6 million from $37.3 million. Among those laid of f include Peter Johnson, vice president and senior economist for strategy, analysis and planning, who was instrumental in developing the current research platform; Charles A. Prescott, vice president of global development, who played a role in the DMA’s global symposium at the annual conference; Leslie J. Benjamin, director of education and event marketing; Douglas Berger, director of member communications; James F. Conway, vice president and counsel for corporate and social responsibility; Alan Kuritsky, senior vice president sales and marketing; Marci Silverman, director of membership and research marketing; and Scott Roberts, vice president of corporate marketing communications.