EU, US Regulators Give Green Lights To Microsoft/Yahoo Deal

The strategic search partnership between Microsoft and Yahoo has been formally approved by law makers on both sides of the Atlantic as both scramble to catch up with market leader Google.

The 10-year deal that both companies signed last July mean that Microsoft will take over Yahoo's search with revenues generated shared between the two. Yahoo has stressed though that it will continue to invest in the sector although it remains unclear to what extent this will happen.

Microsoft and Yahoo will then need to combine some parts of their business, a move, which some observers reckon, could allow Google to win a few more points.

During the first five years, Yahoo will earn 88 percent of all search ad sales from the combined entity, a share that will rise to 93 percent for the remainder of the partnership.

The European Commission said that the deal wouldn't "wouldn't significantly impede effective competition" and, like its US counterpart, approved it without any attached conditions.

Microsoft CEO Steve Ballmer said in a statement that "I believe that together, Microsoft and Yahoo will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers" while Yahoo's Carol Bartz added that "This breakthrough alliance means Yahoo can focus even more on our innovative search experience".

Microsoft tried to buy Yahoo back in February 2008 for $45 billion but faced a reluctant Jerry Yang, the founder and then CEO of Yahoo.

Our Comments

Google's share of the search market has reached nearly 90 percent in the UK alone, leaving its competitors with single digit slices. In the US, the world's biggest search player owns 70 percent of the market.

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