DOJs Evaluation Progressing

By Nicholas Kolakowski  |  Posted 2009-10-20 Print this article Print

By all public indications, the Department of Justice's antitrust evaluation of the Microsoft-Yahoo deal is progressing smoothly. During a Sept. 22 event at NASDAQ MarketSite in Times Square, Yahoo CEO Carol Bartz said the government's probe "is going on as we predicted it would," adding: "We don't expect any[thing] different than we did in July. We still expect it to close in early 2010."

Yahoo hosted that event to announce the launch of a $100 million branding campaign designed to help re-establish the company as a viable entity in the online space, despite the partnership deal with Microsoft and loss of market share to Google. 

Microsoft also confirmed, on Sept. 11, that the Department of Justice was examining the deal, but declined to share more than cursory details.

"As expected, Microsoft and Yahoo have received requests for additional information about the agreement," Jack Evans, a Microsoft spokesperson, said in a statement e-mailed to eWEEK at the time. "As we said when the agreement was announced, we anticipated that this deal will be closely reviewed and we are hopeful it will be approved by early 2010."

Under the terms of the agreement, Microsoft's search engine, Bing, will power Yahoo's search, while Yahoo will exclusively handle worldwide sales for both companies' search advertisers.

Since the deal was announced in July, though, Yahoo has been struggling mightily with the perception that Bing taking over its search apparatus reduces it to an online has-been. During an Aug. 24 press conference, Prabhakar Raghavan, senior vice president of Yahoo's Labs and Search Strategy, pushed the idea that, while Yahoo had pulled out of the "megawatt war" for search, it is very much a competitor in areas such as e-mail.

Yahoo's new strategy involves bolstering its current end-user offerings, including Yahoo Messenger and Yahoo Mail, while integrating sites such as YouTube, Facebook and LinkedIn into its front-end search results. The company evidently hopes that users staying on its sites longer will translate into increased advertising revenues.

Bartz, at the Sept. 22 conference, reacted with typical forthrightness at the idea that Yahoo was struggling, accusing the assembled media of playing up the company's supposed demise.

"I think people put a cloud over [Yahoo's] head, and the company put a cloud over its head," Bartz told the room's two dozen journalists. "I just want to transplant all you guys out of your cynicism. Why aren't you cynical about Google? Leave us alone-we'll just deal with our users because we do great things for them."


Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.

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