House Small Business Subcommittee Chairman Questions Google-Yahoo Ad Deal

By William G. Korver, Reporter, BroadbandCensus.com

WASHINGTON, June 25 – The congressman who represents the headquarters of telecommunications giant AT&T used a Wednesday subcommittee hearing on the impact of online advertising to raise concerns about the recent agreement between Google and Yahoo!

Since “competition is always a good thing,” the recent advertising agreement between the world’s two largest web sites is a cause for concern, said Rep. Charles Gonzalez, D-Texas.

Gonzalez made the remarks at a House Small Business Subcommittee on Regulations, Health Care and Trade Hearing, “The Impact of Online Advertising on Small Firms.” He is chairman of the subcommittee.

The domination of the online advertising industry by one company is never healthy, said Gonzalez. The fact that the two search engines combine to boast almost 80 percent of the total amount of searches on the Internet is a cause of serious concern, said Gonzalez.

The Texas Democrat has repeatedly raised anti-competitive concerns about Google, particularly when the web site has pushed for Net Neutrality over the opposition of Bell companies.

While some may suggest that “temporary monopolies” are a product of today’s rapid changes in technology , the basic principle that competition promotes innovation remains, Gonzalez added.

Rob Snell, co-owner of Gun Dog Supply and author of “Starting a Yahoo! Business For Dummies,” stated that new search engines will, over time, replace Google as the premier search engine. Such an event “is inevitable” even without governmental regulation, Snell said.

Gonzalez appeared to agree with Rep. Lynn Westmoreland, R-Ga., that for Congress to regulate internet search engines would be “an answer looking for a problem.”

Still, the government should remain observant about online advertising, said Westmoreland and Gonzalez.

Snell and Richard Lent, CEO of AgencyNet Interactive, said that Google may opt to acquire blossoming companies that may potentially rival its position as the premier search engine in the world.

But Snell said he was confident that Google, which is “light years ahead of everybody else,” would never become an example of “evil” – a reference to the company’s quirky motto, “Don’t Be Evil.”

Randall Rothenberg, president and CEO of the Interactive Advertising Bureau, said that contextual advertising, tailored to a user’s behavioral traits, provides many benefits to internet users.

Rothenberg said he disliked the terms “tracking” and “behavioral targeting,” but Gonzalez pressed him on the fact that internet companies are aware of who their users are. Gonzalez said that privacy concerns were paramount, even as online advertising has fueled incredible growth for small businesses.

Lent said that consumers already have the ability to make use of the “remove cookies” application within web browsers. Lent said privacy concerns were less pressing because of viewers’ ability to delete his or her user history.

Users also benefit from advertising, said Tim Carter, founder of AsktheBuilder.com, as many internet users find a products or solution that serve a purpose through contextual advertising.

Internet advertising has or is in the process of rivaling radio and magazine advertising, said Rothenberg and Lent.

The importance of the Internet to trade is obvious, Rothenberg said. One need only see that more than 3.2 million Americans utilize eBay to supplement their income, and that the Internet provides “disproportionate benefit” to small businesses to understand that the World Wide Web is invaluable and an asset to corporations, small businesses, and micro-businesses alike, he said.

Agreement Referenced in this Article:

Google Blog: Our Agreement to Provide Ad Technology to Yahoo