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Ad agencies stump for Microsoft-Yahoo search deal

Microsoft's proposal to take over search on Yahoo's Web pages will make for a more competitive Internet advertising market, according to four major ad agencies.

An advertising industry association--backed by four of the world's largest ad agencies--sent a letter to the Department of Justice Monday endorsing the Microsoft-Yahoo search deal, saying it "enhances competition."

Four major ad agencies would like to see the search deal signed by Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer come to pass. Yahoo/Microsoft

American Association of Advertising Agencies President and CEO Nancy Hill posted the open letter Monday, which was also signed by Maurice Levy, chairman and CEO of Publicis Groupe; Martin Sorrell, CEO of WPP; Michael I. Roth, chairman and CEO of Interpublic Group of Companies; and John Wren, president and CEO of Omnicom Group. "We believe that Yahoo and Microsoft's proposal to combine their technologies and search platforms is good for advertisers, marketing services agencies, website publishers and consumers," they said in the letter.

The pending deal between Microsoft and Yahoo that would see Microsoft become the exclusive provider of search technology on Yahoo's Web sites will require regulatory approval to move forward, because the government tends to take a closer look at any deal that involves two of three major players in a given industry joining forces. Some have argued that the high barriers of entry in the search market might lead the DOJ to consider restrictions on the deal, such as the sale of Yahoo's search technology to a third party.

Advertisers, however, like the deal because a combined Microsoft-Yahoo search product has the potential to serve as a powerful check on Google's dominance of that market. More money is spent on search advertising than on any other form of Internet advertising.

"A healthy, competitive market for search and search advertising is crucial to the Internet's future," the advertisers said in the letter. "As leading members of the advertising and marketing services industry, we urge the Department of Justice to bring its antitrust review to a speedy conclusion. This proposal enhances competition, and should be allowed to take effect as soon as possible."