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Microsoft Yahoo partnership gets DOJ nod
The U.S. Department of Justice (DOJ) and the European Commission on Thursday finally sanctioned the partnership between Microsoft and Yahoo to build a combine search engine. Both agencies believe that the deal will help break the increasing dominance of Google in Internet search arena.
by Priyanka - February 20, 2010 - comments
According to different market surveys, Google Inc. presently holds 65 percent share of search market in the nation and a reported 90 percent shares in Europe. Keeping this in mind, both agencies approved the deal.
The DOJ said in a statement, "The U.S. 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, the firm that now dominates these markets."
"Most customers view Google as posing the most significant competitive constraint on both Microsoft and Yahoo, and the competitive focus of Microsoft and Yahoo is predominately on Google and not on each other," added the agency.
Implementation of the deal could prove difficult
The deal announced by the companies last year in July, calls for Yahoo to outsource the back-end functions of its search engine to Microsoft such as indexing and crawling Web sites and the abilities to match search results with the queries.
In addition to all this, Microsoft will get the right to access Yahoo's main search technologies and will be able to integrate them into Bing.
After getting approval from DOJ and European Commission, now begins the tough work of implementing the deal for Microsoft and Yahoo.
Both companies will have to be careful and precise while executing the terms and conditions of their agreement in order to provide search competition good enough to take on Google.
Otherwise, they run the risk of confusing their advertisers, disappointing their customers, unsettling employees, creating distance between themselves and application developers and disappointing Web publishers, as a result will end up strengthening Google further.
All eyes on Microsoft-Yahoo partnership
A lot is at stake for both companies with this 10-year deal and all eyes in the search industry will be on them to see how they will implement it.
As per Allen Weiner, an analyst at Gartner, "This is like a baseball trade where you don't know from the outset who is the winner and who is the loser."
According to experts, it will be interesting to see how Microsoft and Yahoo will manage such a complicated deal, in an industry where clashes and infighting can derail the best planned partnerships and mergers.