Brussels greenlights Microsoft, Yahoo! deal
(BRUSSELS) - European and US regulators on Thursday gave their blessing to Microsoft's plan to take on Yahoo!'s internet search and advertising business, designed to challenge market leader Google.
"The European Commission has approved... the proposed acquisition of the internet search and search advertising businesses of Yahoo! Inc. by Microsoft," said a statement from Brussels.
The two companies later said they had "received clearance for their search agreement, without restrictions, from both the US Department of Justice and the European Commission, and will now turn their attention to beginning the process of implementing the deal."
Following tests with search users, advertisers, online publishers and distributors of search technology, Brussels said market players "expect (the deal) to increase competition in internet search and search advertising by allowing Microsoft to become a stronger competitor to Google."
Yahoo! and Microsoft announced in December that they had finalised a revenue-sharing Internet search and advertising partnership -- a year after Microsoft launched an unsuccessful 47.5 billion dollar takeover bid for Yahoo!.
Under the agreement, Yahoo! will use Microsoft's new Bing search engine on its own sites while Yahoo! will provide the exclusive global sales force for premium search advertisers.
The commission said that the deal involves Microsoft acquiring a 10-year exclusive license to Yahoo's search technologies and hiring Yahoo! internet search and search advertising staff, while Microsoft becomes the exclusive internet search and search advertising provider used by Yahoo!.
"In exchange, Microsoft will retain 12 percent of the search revenues generated on Yahoo's and its partners' websites during the first five years of the agreement, paying 88 percent to Yahoo! as a traffic acquisition cost," the EU statement added.
Analysts are divided on how much closer the tie-up will take either company to powerhouse Google, the overwhelming leader in a web search and advertising market which the research firm Forrester estimates will be worth more than 30 billion dollars (22 billion euros) in 2014 in the United States alone.
Google currently enjoys more than 90 percent market share in Europe, the commission noted.
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