Yahoo/Google deal proponents get nervous

With the ad sharing deal between Google and Yahoo expected to go into effect as early as this week, several pro-dealers are suddenly, at the last minute, taking the opportunity to sing its praises. We all know where Google stands, since it published a "fact" list not too long ago aimed at calming fears about the deal. Now Yahoo is doing its part, devoting an entire site to presenting its case for the deal. And not to be outdone, several California members (Google and Yahoo's home state) of the U.S. House of Representatives have sent letters to the Department of Justice warning regulators not to block the deal. Do they know something we don't?

While it's about time that Yahoo came out and added its voice to Google's, its new detailed pro-deal site is a bit dramatic. The company's "Yahoo-Google Search Agreement" site presents a detailed argument for the deal, and includes areas like "Benefits of the Agreement," "Benefits to Advertisers" and links to several other pro-deal sources. It also includes actual testimony from Yahoo, as well as a letter from Yahoo VP of Global Public Policy David Hantman to Ohio Rep. Steve Chabot, rebutting Chabot's contention that the deal would result in Google controlling 90% of the search market. It says:

"This agreement is not a merger, and will in no way result in one company controlling 90% of any part of the online advertising market, including search advertising. In fact, since our plan and intent is to increase our search advertising share over time--not cede any of it to Google--this deal will make us a stronger competitor in the search and display advertising and increase the dynamic nature of this market overall."

While Yahoo argues that the deal will make it stronger, the 11 California representatives take a different approach, claiming that blocking the deal would hurt the industry as a whole down the line. The representatives, led by led by Google and Yahoo’s "hometown" representative, Democrat Anna Eshoo from Palo Alto, write that quashing the deal could result in a "chill" on future agreements that could "detrimentally affect the online advertising market and electronic commerce."

But why this flurry of pro-deal activity now? Could the Department of Justice be ready to launch its suit, right on the eve of the deal? It did hire noted antitrust gun Sandy Litvack, and while it's been holding hearings through the summer, lately it's been relatively quiet. Could it be on the verge of a suit? Looks like Google and Yahoo think so and hope this last-minute charge will change the outcome. But could it be too little too late?