Internet giants form search alliance

Microsoft’s plans to buy Yahoo’s
internet search and search advertising businesses have been cleared by both
European and US regulators.

The European Commission ruled that
the deal “would not significantly impede effective competition” in
the search engine marketplace.

The two US companies first
announced the deal in July of last year.

Microsoft is seeking to increase
its share of the search engine industry, which is dominated by Google.

In explaining its decision, the
Commission said that taken together, Microsoft and Yahoo currently have less
than 10 per cent of the search engine market in Europe, with Google controlling
90 per cent.

The Commission said its
investigation showed that the deal was expected to “to increase
competition in internet search and search advertising by allowing Microsoft to
become a stronger competitor to Google”.

The deal was also backed by the US Department
of Justice.

Under the terms of Microsoft-Yahoo
agreement, Microsoft’s Bing search engine will power the Yahoo website, while
Yahoo will in turn provide the main advertising sales team for Bing.

Microsoft chief executive Steve
Ballmer said regulatory approval for the tie-up represented “an exciting

“I believe that together,
Microsoft and Yahoo will promote more choice, better value and greater innovation
to our customers as well as to advertisers and publishers,” he added.

Yahoo chief executive Carol Bartz
said the two firms would be creating a “breakthrough search alliance”.

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