Hazlett in International Herald Tribune: An Attack on Google

Professor Thomas Hazlett told The International Herald Tribune that the type of merger currently contemplated between Yahoo and Microsoft would have "a plausible efficiency case."

"A Yahoo-Microsoft merger would primarily be designed to attack Google," said Hazlett.

Microsoft offered in January to buy Yahoo in a $42 billion deal rejected by Yahoo as being too low. Instead Yahoo has being looking for partners with whom to stave off Microsoft's attempts at a takeover. Yahoo's announcement last week of a test to outsource advertising to Google raised concerns in Congress and elsewhere that cooperation between the two companies could harm competition.

Yahoo-Google Alliance could bring antitrust scrutiny, The International Herald Tribune, April 14, 2008. By Diane Bartz.

"Yahoo's attempt to form an alliance with Google to stave off Microsoft could run into more trouble with antitrust regulators that Microsoft's unwelcome takeover bid.

"While Yahoo is seeking a business partnership with Googe - unlike the outright merger that Microsoft wants - legal experts say any deal between the world's two largest Internet search services would draw heavy scrutiny from U.S. and European competition regulators.

"'The Justice Department would certainly want to take a serious look at that because it would mean that a firm that would want to take advertisements or to place advertisements would have only one place to go,' said Aaron Edlin, who teaches law and economics at the University of California, Berkeley.

"In recent years, Web search services have taken over from once-popular portals or home pages, like AOL, MSN or Yahoo's own home page, as the primary starting point for many consumers seeking information on the Internet.

"Google held a 59.2 percent share of the U.S. Web search market in February, compared with Yahoo's 21.6 percent and Microsoft's 9.6 percent, the research company comScore said."

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