Google-Yahoo vs. Department of Justice

October 31, 2008

The odds of a Google-Yahoo Web advertising deal are looking increasingly bad. The Wall Street Journal says that both sides may just drop the deal as early as next week. The reason: The Justice Department wants too many darn compromises.


The option to scrap the deal has been on the table before, but Google in particular has begun considering it more seriously as Justice Department talks haven’t progressed. One sticking point has been the department’s discussion of having the companies sign a consent decree stating the terms of the partnership. That would subject their compliance to continuing oversight by a judge.

But dropping it next week? That seems so soon. Well, paidContent speculates that the timing could be linked to Tuesday’s presidential election. 

The thinking could be that an Obama win—which would be at least personally supported by Google CEO Eric Schmidt, an avowed Obama supporter—would probably signal a more jaundiced view of what constitutes anti-competitive partnerships. And a McCain win could mean that antitrust regulation would remain fairly loose.

Then there is All Things Digital’s Kara Swisher, who offers an interesting take on all of this. She says Google is really just playing some high-stakes “chicken” with Uncle Sam.

I would bet my Barry Manilow record collection, based on rumblings on Wednesday among those close to the case, that Google (GOOG) is a key whispery source here, sending a very public signal to the Justice Department that it would walk if pushed too far and leave regulators with egg on their faces for not letting the search giant help the struggling Yahoo.

Of course, if the deal falls through all may not be lost for Yahoo. Reuters reported this week that talks seem to be heating up again on a Yahoo-AOL deal.

Keep an eye on:

  • Barack Obama’s campaign “infomercial” was the most-watched telecast in U.S. prime time on Wednesday, drawing an “American Idol”-size audience (Reuters)
  • Facebook may be forced back to the capital markets much earlier than they originally planned (TechCrunch)
  • Publishing empire Conde Nast is scaling back its plans for business magazine Portfolio and cutting company budgets 5 percent (Reuters)

(Photo: Reuters)

One comment

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So much concern over this – and still microsoft and their minions are allowed to run free. And what about the oil companies? This sounds more like microsoft is running the dept of justice.

Posted by Dave | Report as abusive

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