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Microsoft attacks Google-Yahoo advertising deal

Microsoft has attacked the search advertising deal brokered by Google and Yahoo last month. Speaking before a US congressional committee yesterday, Microsoft's senior vice-president Brad Smith said that no single company had ever dominated 90% of a single market in the advertising industry.

Smith also pointed out that Yahoo chief executive, Jerry Yang, had previously warned that any deal between Google and Yahoo would freeze Microsoft out of the search engine market. The claims were also backed by other companies involved in the search advertising market such as Yellowpages.com. It is feared that the Google-Yahoo deal will make it impossible for other companies to challenge Google.

Google, however, defended the deal stating that it will benefit both advertisers and consumers due to increased efficiency. A spokesman for Yahoo also claimed that the deal will make the internet services company even more competitive due to increased revenues. Yahoo set to earn £224m in the first year of the agreement.

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