By David Worthington | Friday, September 11, 2009 at 3:39 pm
The U.S. Department of Justice is placing the Microsoft-Yahoo search partnership under greater scrutiny, according to reports. The DOJ is allegedly requesting more information about ad pricing, product plans, and search engine investments.
Microsoft was prosecuted in the 1990s for abusing its monopoly position in the desktop operating system market, so it comes as no surprise that the company is operating under the long shadow of government regulators. However, in the search engine area Microsoft is playing underdog to Google, which comScore reports held 64.7 percent share of the U.S search market in July.
In comparison, Microsoft’s Bing and Yahoo have a combined 28.2 percent share. If the deal is approved, Microsoft will be in a position to claw its way up to compete with Google. The company is rumored to be preparing to launch an upgrade to Bing before the end of the month, and is spending profusely to promote Bing.
The only people who have any right to be upset about the deal are Yahoo’s shareholders. Shortly after the deal was announced, some shareholders began to cry bloody murder over Yahoo’s use of the Bing search engine for nothing in return.
Further, Yahoo did not receive an upfront payment to make the deal happen, as many Yahoo investors had hoped. The deal’s complexity also makes it unlikely that any company other than Microsoft will be able to acquire Yahoo over its 10-year duration. None of that concerns the DOJ.