Commission gives Microsoft thumbs-up to acquire Yahoo to rival Google - La Treizième Étoile: A blog on EU politics
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Commission gives Microsoft thumbs-up to acquire Yahoo to rival Google

Friday, 19 February 2010
Computer giant Microsoft's plans to acquire Yahoo's internet search and advertising businesses have received a resounding thumbs-up from the European Commission, allowing the deal to go through.

In its ruling made under EU Merger Regulations, the Commission said that the deal "would not significantly impede effective competition or any substantial part of it."

Microsoft, Bing and Yahoo (Photo: physorg.com)Under the terms of the partnership which was struck and announced in July last year but unable to take effect without both EU and US consent, Microsoft's Bing will become the search engine for both sites while Yahoo will focus on attracting the big-name advertisers.

In exchange, Microsoft will retain 12% of the search engine revenues generated via Yahoo's website for the first five years of the deal, while paying the remaining 88% to Yahoo.

The Commission said its investigation into whether to approve the deal on competition grounds, showed that the deal was expected to "to increase competition in internet search and search advertising by allowing Microsoft to become a stronger competitor to Google".

Google, the first port of call for 90% of the global search market, dwarfs the figure of 7.4% for Yahoo and Bing combined, according to November data from Web research firm StatCounter.

Reacting to the news, Microsoft chief executive Steve Ballmer said regulatory approval for the tie-up represented "an exciting milestone".

"I believe that together, Microsoft and Yahoo will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers," he added.

Microsoft has had a previously difficult with the European Union since in March 2004 the EU ordered Microsoft to pay €497 million (£381 million) - the largest fine ever handed out by the EU at the time - in addition to the previous penalties, for abusing its dominant position in the market through the presence of the Windows Media Player program as default on all new computers.

The company back then was given 90 days to produce a version of Windows without Windows Media Player. (Click to read more)

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