Before the dust even settles on the news that Microsoft and Yahoo will partner on Internet searches and advertising, the U.S. government has announced plans to scrutinize the deal. Sen. Herb Kohl (D-Wis.) said the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy, and Consumer Rights will investigate. He is chairman of the subcommittee.
“The deal between Yahoo and Microsoft — industry giants and direct competitors in Internet advertising and search markets — warrants our careful scrutiny,” Kohl said. “Our subcommittee is concerned about competition issues in these markets because of the potentially far-reaching consequences for consumers and advertisers, and our concern about dampening the innovation we have come to expect from a competitive high-tech industry. The implications of this proposed joint agreement will be closely reviewed by my subcommittee.”
Yahoo’s Vision
Yahoo and Microsoft on Wednesday announced a 10-year search partnership in which Microsoft’s Bing search technology will power Yahoo search and Yahoo will become the worldwide sales arm for both companies’ premium search advertisers.
Under terms of the deal, Microsoft will acquire an exclusive 10-year license to Yahoo’s core search technologies and have the ability to integrate Yahoo search technologies into its existing Web search platforms.
Microsoft’s Bing will be the exclusive algorithmic search and paid search platform for Yahoo sites. Yahoo will continue to use its technology and data in other areas of its business, such as enhancing display-advertising technology.
Self-serve advertising for both companies will be fulfilled by Microsoft’s AdCenter platform, and prices for all search ads will continue to be set by AdCenter’s automated auction process. Each company will maintain its own display-advertising business and sales force.
“This deal fits the long-term strategic direction of Yahoo to remain the world’s leading online media company and (CEO) Carol Bartz has the full and unanimous support of the Yahoo board behind this deal,” said…