Microsoft seeks allies in new bid for Yahoo
MICROSOFT is preparing a new bid for Yahoo’s search business and has approached other media companies about joining it in a deal that would effectively lead to Yahoo’s break-up, the Wall Street Journal reported.
Microsoft has already held talks with Time Warner and News Corp, among others, the newspaper quoted people familiar with the discussions as saying yesterday.
The talks are preliminary and are unlikely to result in a deal with Yahoo, the paper said.
In related news, the Washington Post reported on Tuesday that the United States Justice Department had opened a formal antitrust investigation into a deal struck last month that would allow Internet titan Google to provide some search advertising for Yahoo.
Google and Yahoo officials have said since the deal’s announcement that they would delay its implementation for a voluntary Justice Department review. But a formal investigation signals that the department may have found some cause for concern.
Lawyers familiar with similar investigations said that the kind of legal requests being issued by the Justice Department in this case - ‘civil investigative demands’ - are not used for routine matters.
‘They don’t do it without having identified significant issues,’ said Mr M.J. Moltenbrey, a former director in the Justice Department’s antitrust division.
The investigation underscores the high-stakes fight under way to control Internet advertising and, by extension, the content it supports. Google, according to its competitors and critics, could gain a monopoly in Internet advertising if the deal with Yahoo is permitted.
One of the largest chunks of Internet advertising today is ’search advertising’, or the advertisements that run alongside Internet search results delivered by the major search engines: Google, Yahoo and Microsoft.
Google’s is the dominant search engine, while Yahoo’s and Microsoft’s efforts run a distant second and third.
Under the Google-Yahoo deal, announced on June 12, Google would provide search advertising to Yahoo for some but not all Yahoo searches in the US and Canada.
The two would share the advertising revenue, with Yahoo estimated to receive as much as US$800 million (S$1.1 billion) annually from the agreement.
Asked whether Microsoft had been issued a demand for information in the investigation, a company spokesman declined comment.
WASHINGTON POST, REUTERS
Source : Straits Times - 03 July 2008
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