Page last updated at 00:10 GMT, Saturday, 10 May 2008 01:10 UK

Alarm at Google Yahoo partnering

By Maggie Shiels
Technology reporter, BBC News, Silicon Valley

The exterior of Yahoo headquarters in Sunnyvale, California
No firm deal with Google has actually been announced

Regulators in the US are being urged to investigate any potential online advertising and search partnership between Google and Yahoo.

The call by a coalition of 16 American civil rights and rural advocacy bodies comes despite the fact no firm deal has actually been announced.

"We all suffer in such mega mergers," Gary Flowers of the Black Leadership Forum told BBC News.

The justice department is examining a trial the companies did in April.

It has been widely reported that it is looking into the anti-trust implications of last month's two-week test.

However, the department says it has no comment on the coalition's demands because there is no definitive agreement between Yahoo and Google at the moment.

But reports say that the two companies are presently hammering out the intricacies of a future potential advertising and search agreement, and are sharing their plans with antitrust regulators.

At Google's shareholder meeting on Thursday, Chairman Eric Schmidt said: "If there were a deal [with Yahoo], we would anticipate structuring the deal to address the anti-trust concerns that have been widely discussed."

'Never positive'

This assurance is not good enough for the coalition which is made up of the League of Rural Voters, the National Black Chamber of Commerce and the American Agriculture Movement.

It also includes the Black Leadership Forum, an umbrella group of 36 civil rights organisations including the NAACP and the National Urban League.

In a letter to Assistant Attorney General Thoma Barnett, head of the Justice Department's anti-trust division, the coalition argues that such a deal would give Google almost 90% of the search advertising market and strengthen its influence over internet users' access to information.

"We face a possible future in which no content could be seamlessly accessed without Google's permission," the letter states.

The effect Mr Flowers says of such large partnerships is never positive and would for the black community, as for other communities, "condense competition, increase prices and limit new business opportunity on the internet".

'Do no evil'

League of Rural Voters' executive director Niel Ritchie claims that the do-no-evil mantra may no longer apply in today's marketplace in which Google's reach is apparently without bound, touching more and more aspects of our everyday lives.

"We believe the government should give this agreement very careful scrutiny," he says.

Mr Flowers says:

"Google has already exhibited a pattern of violating privacy, engaging in anti-competitive conduct and using its monopoly power in the search market to drive internet users to its affiliated services and its viewpoints on policy matters.

"Any joint combination with Yahoo could dramatically worsen these problems."

The Centre for Digital Democracy, a consumer advocacy group, is also willing to push regulators to block any deal and wants European consumer groups to raise concerns with European Union officials.

"You can't allow Google to operate a portion of its leading competitor out of its back pocket," Jeffrey Chester executive director of the CDD told the Associated Press.

There has been no comment from Yahoo or Google.


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