Yang talks up Google partnership in Washington

Yahoo's CEO Jerry Yang made the rounds on Capital Hill on Wednesday, in an effort to dispel antitrust concerns surrounding its search advertising deal with Google.

During his one-day visit, Yang met with Sen. Herb Kohl, D-Wisc., who chairs the Senate Antitrust Subcommittee.

Kohl has previously expressed concerns that the deal between two technology search rivals could affect competition and have ramifications for advertisers and consumers. He noted the antitrust subcommittee plans to investigate the competitive and privacy implications of the deal.

Sen. Joe Barton of the U.S. House Energy & Commerce Committee also weighed in on the issue Wednesday, issuing a statement (PDF) that expressed concern about the deal's effect on competition in search advertising.

While Barton was not available to meet with Yang on this trip, the senator indicated he would be available next week. And also on the meet-and-greet trip was Rep. Edward Markey, chair of the Telecommunications and the Internet subcommittee for the House Committee on Energy & Commerce.

Google's slice of the U.S. search market reached 68.29 percent in May, according to Hitwise. Yahoo's share of the market declined to 19.95 percent from 20.28 percent in the at same time.

Yahoo, however, has previously said its arrangement is non-exclusive and does not require Yahoo to use any certain number of Google ads on Yahoo's search results page, nor does it require to give Google's ads preferential treatment on where they appear on the right-side column of Yahoo's search results page, where the sponsored links appear.

Yahoo is hoping to benefit from serving up advertisements on its search results pages where there are few advertising links that appear on the right-side column with relevant ads. For example, conduct a search for Fresno and spa and eight advertisements show up on Yahoo, but only two are actually for spas in Fresno. Yahoo gets its advertising dollars only if a user clicks on an actual ad, so the more relevant ads it can post on its search results page, the better its revenues.

Yahoo is hoping to use Google's ads to populate those search results where it tends to have fewer ads. Should Yahoo have a competing ad or ads on the same search page, may the most relevant ad that can entice a user to click on it win.

Whereas Yahoo is looking to bolster its advertising inventory by allowing Google to post its ads on its search page, Google is going in the opposite direction by scaling back on the number of irrelevant ads it has on its search results page--adopting the view that less is more. The search giant on Wednesday also said it is rewarding advertisers with fast-loading advertisements.

Yahoo is giving the U.S. Department of Justice three-and-half months to review its Google partnership, before it implements the search advertising partnership. Regulators, however, may find it more useful to evaluate the partnership after it's been implemented when they can assess the before and after effect.

Yahoo, meanwhile, also addressed privacy concerns raised by the legislators.

"Yahoo is deeply committed to building on our established trust with users by continuing to provide clear, comprehensive privacy policies. We structured the agreement with Google so that Yahoo will not transfer any personally identifiable information to Google without user consent," Yahoo said in a statement. "We have also designed this agreement so that both companies have stayed within each of their existing privacy and data policies, such as Yahoo's policy regarding logs anonymization after 13 months."