Wednesday, April 23, 2008

Google and Yahoo act on DoJ probe

Go to Financial Times original
Google and Yahoo have res ponded to inquiries by the US Department of Justice’s antitrust division about an alliance they launched earlier this month that had been expected to improve Yahoo’s bargaining position with Microsoft.

Yahoo, the search company that is seeking to fend off an unsolicited $43bn takeover bid by the software giant, on Wednesday said it had “proactively” kept the DoJ informed about its intention to conduct a limited test with its rival, Google, and that it had provided the DoJ with information about the test.

Google said: “We informed the justice department before we launched this test and we have been responsive to their questions about it.”

Under the test, which was revealed this month, Google supplied relevant adverts alongside Yahoo’s search results. The test drew an angry response from Microsoft, which said at the time that any definitive agreement between Google and Yahoo would make the search advertising market far less competitive.

The DoJ’s antitrust division said it was aware of the collaboration. It declined to confirm or deny a report by Reuters that said competition authorities had launched an investigation into the matter. It was not uncommon for the DoJ to make preliminary inquiries in matters of this magnitude, even if they did not lead to serious investigations, antitrust attorneys said yesterday.

Reuters, citing a single un named source, said some of the government’s concern focused on a phone call from Eric Schmidt, Google chief executive, to Jerry Yang, the chief executive of Yahoo, to offer assistance in dislodging Microsoft’s proposed bid for the company.

Questions about a potential inquiry by the antitrust division, which has made the prosecution of collusion a top priority, comes at a difficult time for Yahoo.


No comments: