Google to push alliance with Yahoo!

26 April 2008

Mumbai: Google Inc proposes to push through its business deal with rival search engine Yahoo! and hopes to get regulatory clearance as it would be "non-exclusive" and falls short of an outright merger.

Yahoo has completed a two-week test of Google's system for selling ads alongside its own website to explore alternatives to Microsoft Corp's $44.6 billion takeover offer, which it rejected as being too low. (See: Yahoo to test Google AdSense; in alliance talks with AOL)

While the US justice department is questioning the companies about potential competitive issues raised by a partnership, Google said such a partnership, in which Yahoo would use Google's more profitable search advertising platform to make more money for itself, would not be anti-competitive.

Google has such arrangements with other web companies, including Time Warner Inc's AOL and IAC (InterActiveCorp), source said.

According to Google, a takeover by Microsoft of Yahoo should, on the other hand, raises far more antitrust concerns as the combined company could corner large chunks of multiple markets.

A tie-up between Google, the top search engine, and No 2 Yahoo would also give them a combined 80 per cent share of the market.