Google-Yahoo deal could be on permanent probation
By John Lister
It’s looking as if the Justice Department could make a final decision on the Google-Yahoo advertising deal next week. But an influential politician says the deal should kept under close scrutiny even if they get the thumbs up.
When the two search rivals announced the partnership in June, they said they’d delay putting it in practice for three and a half months to give lawmakers enough time to review the antitrust implications. That deadline is fast approaching and, while government doesn’t (in theory) act to corporate timetables, Google and Yahoo will likely feel justified in launching the deal if they aren’t told otherwise.
There’s no official word from the Justice Department about the decision, and relatively little in the way of leaks from inside sources. The best bet seems to be that it will be approved with the addition of strict conditions, but that’s only speculation.
The political pressure increased this week when Herb Kohl (pictured), chairman of the Senate committee which monitors antitrust issues, wrote to the Justice Department urging it to continue to monitor the situation even if it approves the deal.
Kohl said he wouldn’t make any recommendation on the approval issue as he hadn’t seen all the confidential submissions the companies made to the Justice Department. But he warned that even if the deal is fair at the moment, there’s an ongoing risk, saying “…should the amount of advertising outsourced by Yahoo to Google grow significantly, we believe the threat to competition will also increase.”
The letter follows a missive last week from politicians in Yahoo and Google’s home state of Florida warning that government intervention on the deal could hurt the online advertising market.
Whatever the outcome, Yahoo will likely be hoping for an end to the uncertainty. Its stock closed yesterday at a five-year low of $15.32 – less than half the amount Microsoft offered in its buyout proposal.
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