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Agence France-Presse
Inquirer.net
First Posted 08:25:00 07/03/2008
SAN FRANCISCO -- The US Department of Justice said Wednesday it is scrutinizing a proposed online advertising deal between Google and Yahoo to make certain it doesn't stifle competition.
"We are looking at the competitive effects of the transaction and how it affects consumers," department spokeswoman Gina Talamona told AFP.
Fresh from a failed courtship with Microsoft, Yahoo last month rushed into Google's arms in the hope an alliance will improve its sagging fortunes and quell a rebellion by stockholders.
The Yahoo-Google deal would put the Internet search king's expertise to work pumping money from advertising posted next to Yahoo Internet search results.
Google technology would be used to better target ads posted on a portion of Yahoo search pages.
Yahoo hopes the alliance will appease stockholders angry that board members rejected Microsoft's February 1 bid, which offered an attractive premium on the market value.
Billionaire corporate raider Carl Icahn has been amassing Yahoo shares in a campaign to overthrow the Yahoo board for rejecting a Microsoft takeover.
Google said while announcing the Yahoo alliance that no regulatory approval is necessary, but that the companies are sharing information with US regulators before proceeding with the high-profile deal.
Yahoo has been vigorously defending the Google deal in letters and presentations to stockholders.
Microsoft has ruled out making another bid for the whole of Yahoo, after it withdrew a nearly $48-billion offer in May, and Yahoo announced June 12 that discussions with the software giant on a tie-up had ended.
In another twist in the Yahoo saga, rumors resurfaced on Wednesday that Microsoft is interested in buying at least part of the California firm.
Microsoft has in the past suggested an arrangement under which it would acquire Yahoo's search engine business.
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