Yahoo CEO says DoubleClick advertisers may defect

SAN FRANCISCO (Reuters) - DoubleClick could see defections by advertisers put off by Google’s $3.1 billion deal to buy the online advertising market maker, Yahoo Inc. Chief Executive Terry Semel predicted in an interview on Tuesday.

Terry Semel, CEO of Yahoo! Inc., speaks in Beverly Hills April 24, 2006. DoubleClick could see defections by advertisers put off by Google's $3.1 billion deal to buy the online advertising market maker, Semel predicted in an interview on Tuesday. REUTERS/Fred Prouser

But Yahoo’s top executive stopped short of joining calls for antitrust regulators to scrutinize Google Inc.’s DoubleClick takeover, which were made by rivals Microsoft Corp. and AT&T Inc..

“I understand their concerns, for sure,” Semel said in a phone interview, responding to a question about whether Google’s move raised antitrust issues. “We have heard concerns from various advertisers, ad agencies and others,” he said.

Yahoo generates roughly half its $1 billion-plus quarterly revenue from selling display advertising online. Corporate marketers use display ads to promote their brands through Web page banner and other online ad formats.

The Sunnyvale, California-based company is the market leader in online display search advertising. Meanwhile, Google has nearly half of the fast-growing U.S. Web search ad market, while Yahoo is second with 27.5 percent, industry data shows.

DoubleClick is the largest independent player in the display ad market, sharing many customers in common with both Yahoo and Google. Google’s purchase gives it a foothold in the display market where it has little presence.

Speaking to Wall Street analysts earlier, Semel welcomed the greater competition promised by the Google-DoubleClick merger.

“It’s a good validation of our strategy for the last few years,” Semel said. “We ... are happy to see others now finally coming to that table.”

Major players in media, technology and telecommunications industries are reacting to the rapid expansion into new markets by Google, which has struck major deals to supply TV ads to EchoStar and radio ads to Clear Channel.

Semel told investors on Yahoo’s quarterly conference call on Tuesday that some advertisers who liked DoubleClick for its independence from major advertising networks like Yahoo and Google could react to its ownership by Google.

“I think you’ll see, my guess is there’ll be some who are fine and there’ll be many who, perhaps, aren’t fine,” Semel said. “That’s up to them.”