Yahoo-Microsoft deal gets transatlantic thumbs up

Microsoft and Yahoo have announced the US Justice Department has given formal backing to their proposed advertising partnership. It comes on the same day as the European Union confirms it has no objections to the deal.

The EU backing had been widely expected after comments by an insider last week. The Justice Department hasn’t publicly explained its decision, but it’s likely it agreed with the EU’s logic that the tie-in is more likely to put competitive pressure on Google than to restrict the market as a whole.

It will likely be 2012 before the deal is complete, at which point Yahoo will concentrate on major advertisers and agencies for search optimization and marketing. Microsoft will concentrate on smaller firms who take care of their own online advertising. The first step in the process will be for Bing to power the searches on all Yahoo pages, which is expected to be in place by the end of this year.

The deal will still need approval from officials in Korea, Japan and Taiwan before taking effect in those countries, but it appears the firms are confident that either won’t be a problem, or that rejection there won’t harm the tie-up overall.

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