Justice Dept. clears Microsoft, Yahoo search deal

The two companies get the blessings they needed to consummate their search partnership--approval from the DOJ and the European Union.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney
2 min read

Microsoft and Yahoo have cleared the final hurdles to their search outsourcing deal--approval from the U.S. Justice Department and the European Union.

The two companies said Thursday they will now focus on the nitty-gritty of the transition.

"Implementation of the deal is expected to begin in the coming days and will involve transitioning Yahoo's algorithmic and paid search platforms to Microsoft, with Yahoo becoming the exclusive relationship sales force for both companies' premium search advertisers globally," the companies said in a joint press release.

Microsoft CEO Steve Ballmer called the approvals an "exciting milestone" in the process. The agreement was first announced in July 2009, after the two companies failed in their painful, drawn-out efforts to reach a merger deal.

The two companies said they hope to finish the algorithmic search transition by year's end. They would prefer to transition the advertising segment of the deal by then too, they said. But that may be pushed into 2011 if they determine it will be too disruptive to the holiday-advertising season.

Microsoft and Yahoo said they expect to finish the transition by early 2012. Once it's complete, the companies said, "Yahoo and Microsoft will each represent and provide customer support to different advertiser segments. Yahoo's sales team will exclusively represent and support high volume advertisers, SEO and SEM agencies, and resellers and their clients. Microsoft will represent and support self-service advertisers." (SEO stands for search engine optimization, and SEM stands for search engine marketing.)

On Thursday, the EU officially announced its nod to the deal under which Microsoft becomes the exclusive provider of search technology on Yahoo's network of sites. In giving its approval, the European Union said it believes the partnership will not significantly affect competition in Europe. The EU's watchdog arm, the European Commission, said it looked into the impact of the merger on advertisers, publishers, and users. The EC concluded that it will not harm business and will, instead, increase competition in the Internet search and search advertising segment by giving Microsoft more ammunition to compete with Google.

The EU's approval was not a surprise. Last week, such predictions were already surfacing.

Microsoft and Yahoo must still receive approval from regulators in Korea, Taiwan, and Japan "before the deal commences in those specific jurisdictions," they said.

Updated at 8:30 a.m. and 9:00 a.m. PST with information on the Justice Department's approval and more details on the transition.