The SEC and regulators who have to look at the antitrust implications of Yahoo! (NASDAQ: YHOO) using Google's (NASDAQ: GOOG) search advertising system should make the companies disclose the financial details of the deal.
But, the two companies are being allowed to cover-up those details in regulatory filings. The partnership, meant to allow Google text ads to run on Yahoo! search pages, should increase the portal company's revenue. It will also create a near-monopoly in the industry because the two companies together have over 80% of the search market in the U.S.
According to Reuters, "Yahoo has said it expects to generate an additional $250 million to $450 million in additional cash flow in the first 12 months after the agreement goes into effect." But, those are estimates and are not based on the substance of the contract between the two companies that is currently being examined by the federal government.
The SEC has favored significant disclosure on almost all important corporate financial and operating information. It seems that Google and Yahoo! have dodged that.
Douglas A. McIntryre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
8-09-2008 @ 4:08PM
Sugiarto Setiabudi said...
No need to disclose the contract,due to outside the regulator duty.