Approval from authorities allows firms to create "more viable" rival to Google

Microsoft-Yahoo deal given the go-ahead

European and US regulators have approved Microsoft’s search engine partnership with Yahoo, paving the way for the two firms to take on market leader Google.

Under the 10-year agreement, Microsoft will gain an exclusive license to Yahoo’s search technology, and in exchange will become Yahoo’s sole internet search and search advertising provider.

According to the European Commission, Microsoft and Yahoo combined make up less than 10 per cent of the online search advertising and search engine markets, with Google’s portion above 90 per cent.

“US market participants express support for the transaction and believe that combining the parties’ technology would be likely to increase competition by creating a more viable competitive alternative to Google,” a statement from the US Department of Justice read. “The transaction will enhance Microsoft’s competitive performance because it will have access to a larger set of queries, which should accelerate the automated learning of Microsoft’s search and paid search algorithms and enhance Microsoft’s ability to serve more relevant search results and paid search listings.”

“"Although this particular transaction is not likely to cause harm, the department will continue to be vigilant in our enforcement of the antitrust laws in the search and paid search advertising industry.”

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