Google-Yahoo ad deal will hurt blogosphere

Finally, someone who is speaking sensibly about the Google-Yahoo deal. Slate’s Farhad Manjoo has written a great piece called “Google Plays Monopoly: Why the Google-Yahoo deal is bad for the Web.”

Since the proposed deal (outlined here), everyone (including the idiotic Microsoft) has been against it. Newspapers worldwide (minus the US) have done so, as have many tech blogs. There have been some, however, including some bloggers at the NY Times, who have said there’s nothing to fear. This position is more than stupid; it’s uncritical and like many things in the US, completely enslaved to a corporatist mentality that businesses mean well. I’m sorry to say that we only have to look at the current global financial meltdown to know that American corporations are not looking out for anyone. Hence, the Google-Yahoo deal, which was a godsend for Yahoo, which was also flirting with Microsoft for a buyout. This ad deal between them and Google was supposed to be a “better” alternative. But Microsoft was angry and pushed for a Department of Justice anti-trust investigation. That is happening right now, and is holding up the deal.

During this legal limbo, bloggers and others have been going at it about the merits (and lack thereof) of this deal. They have been mostly oversimplified and reductionist but Manjoo’s is quite persuasive because he is not talking about monopolization (aka Googlization) but how this deal would affect other parts of the Web since Google has its hands in EVERYTHING. He argues that this deal would be quite bad for the small websites and blogs:

It’s not only advertisers who ought to worry about Google gobbling up Yahoo: A more powerful Google will also hold greater sway over the millions of Web sites that depend on advertising for their revenue. Many big sites—newspapers and online magazines like Slate, for instance—and millions of small sites (blogs, e-commerce sites, startup firms) run ads provided by Web companies like Google, Yahoo, and Microsoft. As Michael Arrington—the founder of the tech industry blog TechCrunch, one of the most successful new publishers on the Web—points out, Google doesn’t share much revenue with sites that run its ads. “The only thing keeping them even close to honest is the fact that Yahoo and Microsoft will occasionally compete for those partners,” he argues. Once Yahoo is gone, Google will be able to decrease the revenue given to blogs and other small publishers—a potentially huge blow to a vibrant new medium.

This is why the deal is bad, not because Microsoft is upset that it lost the Yahoo bid.

X-posted at Human Potential.