Uh-Oh! DOJ Expands Review of Microsoft-Yahoo Search Deal


Google (s GOOG) may already have a monopoly on search, but that doesn’t mean the proposed search deal between Microsoft (s MSFT) and Yahoo (s YHOO) will be automatically greenlighted by federal officials. The Justice Department has expanded its review of the partnership agreed to by the search laggards, Bloomberg is reporting. The DOJ is going to challenge the argument that you need to be bigger in order to compete. I couldn’t agree more. My view is that you need to be smarter and faster. Of course as both Microsoft and Yahoo’s history in search proves, they’ve been neither.

For those of us who have an unnatural interest in this deal (I’m looking at you, Kara Swisher), the upside of the DOJ review is that we will soon find out how much Microsoft is spending on Bing, which will reveal if it has any real cash to compete with Google. We’ll also get more details on the ad auction businesses of the companies.

This whole investigation is going to take a while — which will give Google enough time to further increase its market share. Google accounted for 65 percent of all U.S. search queries in July, and almost 75 percent of all U.S. search ad spending in the second quarter.

And once Google has increased it market share to impossible-to-compete-with levels, the Justice Department can then investigate that company — in the process keeping itself very busy, if you catch my drift.


Ravikant Cherukuri

Om, aren’t you contradicting yourself? On the one hand you believe that one does not have to be big to compete with google. In the very next paragraph, you imply that you need “real cash” to complete here. Don’t you have to be “big” to invest “real cash” into an idea?


@Ed, if you consider the product not just search, but search advertising, then they do have significant control, both in volume and revenue share.


Google does not have a monopoly on search. They are the market leader but to use the word monopoly is incorrect and disingenuous.

Dictionary.com says:
monopoly: 1. exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.

How on earth can you say that Google has exclusive control over web search?


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