MSU Law Faculty in the News
Microsoft's Offer for Yahoo Could Spark Antitrust Review
February 2, 2008
Associated Press
By Dan Caterinnichia
WASHINGTON - The Justice Department said Friday it is "interested" in reviewing antitrust issues associated with Microsoft Corp.'s $44.6 billion unsolicited bid for Yahoo Inc.
If the deal goes through, analysts expect scrutiny from Congress, Justice and other enforcement agencies. But they say any concerns about search engine or online advertising market power may not be significant enough to stop the transaction.
"The antitrust division would be interested in looking at the competitive effects of the transaction," said Justice Department spokeswoman Gina Talamona.
Software titan Microsoft is the No. 3 search engine operator, while Internet portal Yahoo is No. 2. Both trail Mountain View, Calif.-based Google Inc., co-founded by East Lansing High School graduate Larry Page.
Microsoft Chief Executive Officer Steve Ballmer indicated he won't take no for an answer.
"This is a decision we have - and I have - thought long and hard about," Ballmer said. "We are confident it's the right path for Microsoft and Yahoo."
In a statement, Yahoo said its board "will evaluate this proposal carefully and promptly in the context of Yahoo's strategic plans and pursue the best course of action to maximize long-term value for shareholders."
Microsoft views Sunnyvale, Calif.-based Yahoo as its best chance to thwart Google, which has leveraged its leadership in Internet search and advertising to emerge as a serious threat to the world's largest software maker's persuasive influence on how people interact with computers.
Google already controls nearly 60 percent of the U.S. search market, and has been widening its lead.
By combining, Microsoft and Yahoo would have a 33 percent share of the U.S. search market, according to data from comScore Media Metrix.
The most basic issue, according to Adam Candeub, a professor at the Michigan State University College of Law, is the possibility of "a concentration of economic power in cyberspace."
Redmond, Wash.-based Microsoft's bid "presents some of the issues we saw with the older Microsoft antitrust litigation with Netscape (a Web browser now owned by AOL LLC)," he said, "which is the idea that if Microsoft is selling the software, there may be some sort of preferential treatment, some effort to foreclose on other search engines or advertising platforms."