DoJ to probe Google Yahoo! deal

While Microsoft seeks partners for renewed bid

By John Oates • Get more from this author

Posted in Financial News, 2nd July 2008 08:54 GMT

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The US Department of Justice is to open a formal investigation into Yahoo!'s partnership with Google, fearing it will reduce competition in the online advertising market.

The DoJ is preparing demands for information for executives at both companies and also from rival online advertising firms. The department was already looking at the two week test run by Google and Yahoo!, but a formal investigation would suggest it had concrete concerns.

The DoJ would not normally open a full probe unless the two firms were carrying out a full merger.

Investigators are issuing "civil investigative demands", according to the Washington Post, which suggests the regulator has some big questions about how the deal will work.

By effectively joining the first and second placed players for search advertising the deal was always likely to worry competition authorities. Google had been busy lobbying politicians in Washington who are also expected to look at the deal.

Meanwhile, the zombie deal that just won't die - Microsoft is apparently seeking partners to restart the attempted Yahoo! takeover.

This time round Microsoft has talked to Time Warner and News Corp about possibly dividing up Yahoo!, the Wall Street Journal reports. Microsoft would take Yahoo!'s search business while the other partner got the rest of the company. ®

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