Investigation of Microsoft/Yahoo deal deepens

US anti-monopoly investigators have asked Microsoft and Yahoo for more details of their proposed online search partnership to challenge market leader Google.

US anti-monopoly investigators have asked Microsoft and Yahoo for more details of their proposed online search partnership to challenge market leader Google.

Neither company has revealed the nature of the request, but observers said it is likely to be around the impact the deal will have on the pricing of online advertising.

Advertisers are hoping that a stronger competitor to Google will accelerate the fall in prices for search terms initiated by the downturn.

The request for more information marks a deepening of the investigation, but Yahoo said it did not expect closure of the deal to be delayed, according to the Financial Times.

Both Microsoft and Yahoo anticipated a lengthy review and said from the start that they did not expect the deal to close before the end of the year.

Although the deal is likely to be approved, US authorities did block Heinz from acquiring Beech-Nut to take on market leader Gerber.

This means Microsoft may have to put up a fight, as Oracle did to acquire PeopleSoft to boost competition with SAP.

European anti-monopoly authorities are not reviewing the proposed deal because Microsoft and Yahoo would have a combined share of only 10% of the European search advertising market.

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