Microsoft Corp. and Yahoo! Inc. received approval for their advertising pact from both the Justice Department and the European Commission today, the companies announced.
Main Justice reported earlier today the Justice Department had closed its investigation into the deal and was set to approve it. Through a listing provided by the Federal Trade Commission this afternoon, the DOJ also said it signed off on the deal.
The partnership was announced last July, but the details took several more months to work out. Under the terms of the agreement, Microsoft’s Bing will be the search engine for Yahoo sites, and Yahoo will handle search advertising sales for both companies.
The deal has been through several iterations. It began in January 2008, when Microsoft announced a $44.6 billion hostile bid for Yahoo. Yahoo rejected the bid and struck a search partnership with Google, but the Justice Department threatened to block the deal in November 2008 and the companies abandoned it.
The less formal alliance between Microsoft and Yahoo is an attempt to build a viable competitor to the Google search juggernaut.
In its investigation into the Google-Yahoo deal, the Justice Department found that Google had more than 70 percent of the market in both Internet search advertising and in the market for handling searches on other Web sites.
In assessing whether the Microsoft-Yahoo pact raises antitrust concerns, regulators look both at the structure of the whole market, which Google dominates, and also at what competition between the two companies the deal would eliminate.
In clearing the deal without conditions, the Justice Department concluded that the parties don’t compete head-to-head much either for advertisers, or for publishers that use search engines on their own sites.
“Most customers view Google as posing the most significant competitive constraint on both Microsoft and Yahoo!, and the competitive focus of both Microsoft and Yahoo! is predominately on Google and not on each other,” the Justice Department said in a statement announcing its decision.
According to a person familiar with the investigation, the Justice Department’s Antitrust Division had largely signed off on the matter several months ago, before Microsoft and Yahoo filed their formal paperwork on the deal. The notice released today by the FTC signals that Justice officials approved the pact without opening an extended review after the companies sought formal approval.
updated at 6:35 p.m.
All I can say is, WOW. It wasn’t very long ago that Microsoft anti-trust legislation went through. Google certainly has changed the landscape. Now Microsoft is the good guy again. Saga to be continued I’m sure.