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Microsoft Unlikely to Win Yahoo-Google Fight

  • Fortune, Thursday, June 26, 2008 11:17 AM
Microsoft has begun the battle to keep a Yahoo-Google search pact from materializing, but antitrust lawyers and technology analysts contacted by Fortune don't seem to think the software giant has much of a prayer stopping this one. Even so, Ballmer & friends won't go down without a fight: as Fortune says, Microsoft seeks to either derail or heavily delay the Google search deal, sending lawyers to Washington to discuss Google's search monopoly; meanwhile, the company is also still interested in acquiring Yahoo's search business, which would now cost an additional $250 million, per the Google buyout clause.

According to antitrust experts, arguing that a Yahoo pact makes Google too powerful isn't a good enough argument. "I see [Microsoft] exercising political jargon here. It's surprising," says Glenn Manishin, an antitrust and technology policy lawyer at Duane Morris. "Every antitrust lawyer would agree big isn't bad. Bad is bad." And by "bad," Manishin means driving prices upward. Since search is an open market, it's not as susceptible to price gouging as other markets.

The Fortune report points out that Google and Yahoo could conceivably start their business arrangement today, since only mergers above $50 million need federal approval beforehand. Manishin adds that it's not uncommon for deals of this size to receive some federal scrutiny, but Bush Administration appointees at the Department of Justice tend to favor large deals.



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