Yahoo is getting a lot of attention lately because of Microsoft’s unsolicited buyout offer and consequent decision to place Google ads alongside its search results for 2 weeks. The U.S. Justice Department noticed and has decided to investigate.

Interestingly, both Yahoo and Google claim they informed the Justice Department that they would be performing the test. Google told Reuters “we informed the Justice Department before we launched this test and we have been responsive to their questions about it.”

Yahoo backed up that claim saying “Yahoo proactively kept the Department of Justice informed of its intentions to conduct this limited test with Google and have provided information to DOJ on the nature of the test.”

Combined, Yahoo and Google control almost 80% of the search engine market, which certainly brings into focus how few real competitors exist in the space.

Microsoft has been unwilling to increase its bid price and has indicated that it’s willing to rescind its offer if the two companies can’t come to agreement on price. But it isn’t giving up yet.

Chief Executive Steve Ballmer says “we think the best way to move forward quickly is to come together with Yahoo. Hopefully that works. But if it doesn’t, we go forward.”

Those certainly sound like fighting words, and Ballmer is prepared to take a lower offer directly to shareholders if Yahoo’s board won’t agree to the existing terms. It’s typical Microsoft tactics, whenever Microsoft gets behind in a hot technology, it buys its way into the market–often with hostile tactics.

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Entry was posted on Wednesday, April 23rd, 2008 at 9:45 pm under Google, Microsoft, Yahoo!.

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