The deal to make Microsoft the exclusive search provider for Yahoo received much attention around these parts (as nearly everything surrounding Microsoft does) but according to a report on CNET, by consolidating the lucrative search/online advertising market from three to two major players, the deal might not pass Justice Department muster as is:
In this case, the Justice Department is likely looking at two different aspects of the deal. On one hand, regulators are expected to probe whether advertisers will be harmed by the loss of an outlet for their ad dollars, as well as whether Google has less incentive to compete for searchers now that there’s only two fish in the pond. … “This deal is going to eliminate a competitor in search in a market that has high barriers to entry and only has three players,” [antitrust lawyer Matthew] Cantor said. He compared it to the reaction that would have arisen in the 1960s if two of the three major television networks had decided to merge amid a far-smaller media landscape.
[…] Cantor thinks the Justice Department will force Microsoft and Yahoo to put Yahoo’s search technology assets up for auction to let the deal go through. That would allow a third major player to enter the business, although that new entrant would still have the burden of attracting searchers: Yahoo has said that an overwhelming majority of the people using Yahoo search are already doing so from a Yahoo Web page, the combination of which are among the most visited pages on the Internet.
However, that might not be as appealing to Microsoft and would at least throw the deal into question. The company has spent millions on the development and launch of Bing, but it likely is interested in retaining certain aspects of Yahoo’s search technology, not to mention some of its engineers.
It’s interesting that with all the focus in the Seattle Times about Google’s supposedly crushing monopoly, little has been written about the anti-competitive aspects of Microsoft’s own search initiative. Huh. Good thing, at least, there’s plenty of competition in the tech news and analysis business.
fuck you goldstien
Since we do we not like “less competition” in the marketplace? That’s been our driving goal for YEARS! Our official government position is still that we don’t like monopolies, but limiting competition if fine. There were two satellite radio companies. The gov approved their merger…only one now, an actual monopoly. No problem. Banks can merge and merge until we only have Chase, Citi and Bank of America. Health insurance can merge until only one company serves a state.
Why all of the sudden are we pretending competition for consumer benefit is the rule? The rule is whatever benefits corporations will be law. Why? Because corporations contribute more to political campaigns than I can. And you might want to note the Supreme Court reviewing a case right now that may effectively eliminate ALL restrictions on corporate political spending. See, money is free speech. But only to corporations. They may be allowed to raise unlimited money. Me, I still can’t. But I’m not important, I’m not a corporation, the only real “citizens” in this country.
Business is good! Private business is what makes our country. Don’t get confused. I’m not bitching about BUSINESSES. I’m specifically talking “corporations”, the idea of a large business as a “legal person” in the idea of the law. It’s an affront to everything the founding fathers cared about and the “strict constructionist” should be furious at the idea. YOU can own a business, and YOU are a citizen with rights. But the idea that your BUSINESS is a citizen or has the rights of a citizen is insane.
@1 What is with the anti-reason foul mouthed insult only Republicans on here. There wasn’t even a criticism buried IN the response. No defense or attack of the Justice Departments decision. Just an FU? Republicans, anti-science, anti-reality, anti-reason. Just name calling children.
Paging Paul Andrews…
Google is the 800 pound gorilla, and we should not forget that. Microsoft can be real ruthless. I don’t use Microsoft products. Happily a mac user for close to a decade. The only time I use Windows is in a sand boxed environment when I need to test for IE stupidity.
But that being said I worry about Google just as much as Microsoft.
Monopolies are monopolies. And oligopolies are not much better, in someways worse because people focus on monopolies and forget about the nearly equivalent stifling power of oligopolies. So there should be a check on Google. And unfortunately Bing is not the answer. So I agree with the Justice Department’s intuition here.