Competition worries over Google-Yahoo! prospect

14th April 2008

Competition authorities in the US and Europe could have concerns about a deal between Yahoo! and Google, new reports suggest.

As speculation mounts over a possible merger between Microsoft and Yahoo! or an alternative deal that would combine AOL and Yahoo! under Time Warner's control, the alternative possibility of a partnership between the two search companies has arisen.

But Chris Silver Smith, lead strategist at Netconcepts, told Online Media Daily that marketers could find the costs of advertising online could rise following a Yahoo!-Google deal.

He said: "And it's kind of nice to have alternatives to Google's distribution."

And competition regulators are likely to be more sympathetic to a Microsoft deal with Yahoo! than an alliance between the company and Google, Thomas Hazlett, law and economics teacher at Virginia's George Mason University, told Reuters.

While a company combining Microsoft and Yahoo! could potentially challenge Google's dominance, the sector would become even less competitive if the two search engines combined, he explained.

AOL has made a deal to provide online advertising services to Verizon Communications, it has emerged.