Posted by Johanna Shelton, Policy Counsel

With all the twists and turns in the online advertising space since the beginning of this year, it's no surprise that Members of Congress would be interested in looking at the issue of competition in that space.

Today, our Senior VP for Corporate Development and Chief Legal Officer David Drummond, will join officials from Yahoo and Microsoft, as well as advertisers, publishers and others, for a morning hearing in the Senate Judiciary Committee, followed by an afternoon hearing in the House Judiciary Committee. These hearings will focus on competition in online advertising -- an arena that we believe is competitive, robust and dynamic -- and our recent advertising agreement with Yahoo.

Because of its founding principles of openness and interoperability, the Internet is an extraordinarily competitive environment, where competition and choice are only a click away. Our advertising agreement with Yahoo! will maintain and expand that competition. Among the key points David will make today are:
  • This agreement will be good for Internet users (who will see ads that are better targeted to their interests); advertisers (whose ads will be better matched to users' interests, allowing them to reach potential customers more efficiently), and website publishers (who will see increased revenue from better-matched ads on their websites).

  • Google and Yahoo! will remain vigorous competitors, and that competition will help fuel innovation that is good for users and the economy. As we've said before, commercial arrangements between competitors are commonplace in many industries. Antitrust regulators in the US have recognized that consumers can benefit form these arrangements, especially when one company has technical expertise that enables another company to improve the quality of its products.
  • Our agreement will not increase Google's share of search traffic, because Yahoo will continue to run its own search engine and compete in online search.

  • We're particularly excited that as part of the agreement, Yahoo! will make its instant messaging network interoperable with Google's. This will mean easier and broader communication among a growing number of IM users, and enable users to choose among competing IM providers based on the merits and features of the services.

  • We have taken a number of steps in the Yahoo! agreement to protect user privacy. As Google supplies ads to Yahoo! and its partners, personally identifiable information of individual Internet users will not be shared between the companies. Yahoo! will anonymize the IP address of a searcher's computer before passing a search request to Google.
Here is some additional resources about our agreement with Yahoo:
UPDATE: Check out video of David's testimony below.



UPDATE (7/16): Here's some additional video of David contrasting the competitive effects of our agreement with a possible Microsoft-Yahoo acquisition: