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Microsoft-Yahoo deal gets go-ahead

Yahoo says its search results and advertising won’t be identical to what’s served up on Microsoft’s Bing search engine. Yahoo says its search results and advertising won’t be identical to what’s served up on Microsoft’s Bing search engine. (Paul Sakuma/Associated Press/File 2010)
By Michael Liedtke
Associated Press / February 19, 2010

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SAN FRANCISCO - US and European regulators have cleared the long-discussed Internet search partnership between Microsoft Corp. and Yahoo Inc., enabling the rivals to form a tag team as they try to mount a more serious challenge to Google Inc.

The approvals, announced yesterday, anointed an alliance proposed nearly seven months ago. In 2008, Microsoft had launched a hostile bid to buy Yahoo, only to withdraw the $47.5 billion offer later.

Yahoo now plans to rely on Microsoft’s search technology in an attempt to boost its sagging profits. Microsoft is counting on the 10-year deal to provide more muscle as it tries to counter Google’s domination of the lucrative Internet search market. The companies make money by charging advertisers to pay to have their links appear when people search for certain terms.

But the deal could still prove to be too little, too late: The US Department of Justice and the European Commission had no problems with Microsoft and Yahoo working together largely because Google is so far ahead of them. Google processes two-thirds of the world’s search requests, followed by Yahoo with 7.4 percent, China’s Baidu.com at 7 percent, and Microsoft at 3.2 percent, according to comScore.

The companies hope Microsoft’s technology will be ready to start processing search requests on Yahoo’s US site by year’s end.