COMPLICATIONS IN MICROSOFT-YAHOO DEAL INCREASE
Microsoft stock drops, antitrust questions arise
By Jason
ELLENSBURG, WA – In the week following its $44.6 billion bid for Yahoo Inc., Microsoft Corp.’s market value has dropped by nearly the same amount. Troubles for Microsoft don’t end there, as the deal could mean an antitrust battle that would further separate them from competitor Google Inc.
“If this deal goes through, there will be a lot of very close scrutiny…a lot of enforcement agencies will be interested,” said Harry First, a professor at New York University’s School of Law. The Justice Department has already stated it’s interest in reviewing the issue, and Google doesn’t intend to let it end there. The online search company is petitioning regulators worldwide to think about “troubling” effects of the combination.
Microsoft has a strong case, however. “Google’s clearly got a dominant position. They’ve got about 75% of paid search worldwide,” said Steve Ballmer, Microsoft’s chief executive. He went on to say that a Microsoft-Yahoo combination would create stronger competition in the online advertising market.
Analysts agree that Microsoft does have a chance. “The fact that Google dominates this business will be a big factor in their (Microsoft’s) favor in trying to get this approved by the regulators,” said Kyle Hylton, a professor of antitrust law at Boston University.
