Microsoft, Yahoo Deal Approved by Microsoft Beneficiary
Microsoft and Yahoo's search-and-advertising agreement received a thumbs up from the American Association of Advertising Agencies, which includes Publicis Groupe, which just finalized a deal to acquire Microsoft subsidiary Razorfish for $286.8 million and 6.5 million shares of stock. The U.S. Department of Justice is conducting an antitrust evaluation of the Microsoft-Yahoo deal, still on track to finalize in early 2010.Microsoft and Yahoo's search-and-advertising agreement is still being evaluated by the U.S. Department of Justice, but the two companies have approval from at least one quarter: the American Association of Advertising Agencies, an ad-agency group that includes major firms such as Interpublic Group, Omnicom Group, WPP and Publicis Groupe. "A healthy, competitive market for search and search advertising is crucial to the Internet's future." Nancy Hill, president and CEO of the AAAA, wrote in an Oct. 19 open letter to the DOJ. "We believe that Yahoo and Microsoft's proposal to combine their technologies and search platforms is good for advertisers, marketing services agencies, website publishers and consumers."
The letter does not explicitly mention that the combination of Microsoft and Yahoo potentially creates a more formidable competitor to Google, which currently dominates the lion's share of the U.S. search engine market and thus has substantial leverage to dictate advertising rates and rules. Nonetheless, Hill hints at the match-up in the letter's conclusion: