Microsoft: Yahoo! deal hands 90% of search business to Google

16th June 2008

Microsoft, whose negotiations over a Yahoo! takeover reached a dead end last week when the search firm announced an advertising deal with Google, has spoken out against the arrangement.

According to sources close to the firm who spoke to Reuters, the software giant sent an email last week attempting to win policy-shaping advocacy groups in Washington over to its cause.

The email reportedly claimed that the deal would "limit choice for advertisers and publishers" and "destroy a competitive alternative".

A spokesperson for Microsoft last week made its objection to the deal, which is to see Google ads placed next to Yahoo! search results, public.

Company representative Jack Evans said that any arrangement between the two firms would consolidate some 90 per cent of search advertising business in the hands of Microsoft and drive up prices.

Meanwhile, a separate Reuters report noted that Carl Icahn, the investor planning to launch a proxy fight against Yahoo! to secure a Microsoft acquisition, admitted that the Google deal "might have some merit".